How to Not Conduct Layoffs: Meta vs. Twitter
Elon Musk, the world’s richest man, became Twitter’s largest shareholder in April 2022. Later that month, Musk wrote a letter to Bret Taylor, Chairman of the Board, offering to buy all shares — a deal worth $44 billion.
Musk, who previously criticized the social media company for its account-banning practices and what he called censorship, wrote in his letter that Twitter had the "potential to be the platform for free speech around the globe."
The only way for it to achieve that potential? Transform it into a private company, wrote Musk.
Fast forward to October 27. Following a roller coaster period of will he or won't he buy Twitter, Musk closed the deal and became Twitter's new owner.
The two weeks that followed will be used as a case study for years to come in what not to do when taking over a company.
What Is Happening at Twitter?
Hours after Musk assumed the helm at Twitter, he fired top executives, including CEO Parag Agrawal, CFO Ned Segal and head of legal policy, trust and safety Vijaya Gadde.
Musk announced himself as interim CEO and dissolved the company’s board — though he later claimed it was temporary. He also closed Twitter offices and temporarily suspended employee badge access.
Twitter staff learned of potential layoffs via an email signed by "Twitter." Hours later, many found themselves locked out of company emails, Slack accounts and computers — before receiving any notification about their job status.
Those that did get an email — around 3,700 employees — got messages that said something to the effect of: “Today is your last working day at the company.” The layoffs effectively halved the company's workforce from 7,500 to 3,800.
Related Article: How Corporate Culture Feeds Into the Bottom Line
Why Did Twitter Lay Off Workers?
Musk agreed to pay $54.20 per share to buy Twitter in April 2022. By July, the stock price plunged to $32.65.
The billionaire attempted to backtrack on the deal for months, alleging Twitter had misled him about the abundance of fake accounts. Twitter sued Musk to complete the deal and, eventually, Musk gave in. The deal officially closed on October 27, 2022.
Stock prices rebounded — sitting at $53.70 today — but Musk still claims he and other investors were “obviously overpaying” for Twitter. Yet that wasn’t Musk’s only problem.
Once the transition of ownership became official, major advertisers began pulling their budgets away from Twitter. Musk accused "activist groups" for forcing advertisers to drop the company. This in spite of a meeting Musk had with advertisers shortly after the deal finalized, where he failed to provide assurances about the platform's future. His vocal support of loosening content moderation, the layoffs that erased existing relationships with advertisers, and his own behavior on the site including retweeting conspiracy theories around the attack on Paul Pelosi, created an environment antithetical to wooing advertisers.
He later cited the profit loss as the reason for Twitter layoffs, writing, “Regarding Twitter’s reduction in force, unfortunately there is no choice when the company is losing over $4M/day.”
Related Article: How Corporate Culture Feeds Into the Company's Bottom Line
Why Is Meta Laying Employees Off?
Twitter isn't the only company dealing with layoffs. On November 9, Mark Zuckerberg wrote a message to Meta employees sharing plans to reduce staff significantly.
Zuckerberg claimed the ecommerce surge at the start of the pandemic led to “outsized revenue growth,” with many predicting a permanent acceleration. As a result, the company significantly increased its investments.
“Unfortunately, this did not play out the way I expected,” wrote Zuckerberg. Instead:
- Ecommerce returned to pre-pandemic trends.
- The economy took a downturn.
- Competition increased.
- Ads faced signal loss.
The result? Meta saw much less revenue than expected.
Zuckerberg announced he would lay off more than 11,000 employees — around 13% of its workforce. Similar to Twitter staff, Meta claimed it would notify affected employees via email.
Yet in contrast to the Twitter layoffs, Meta offered avenues for those impacted to speak with a Meta representative, ask questions and/or join information sessions.
How Is Zuckerberg Approaching Meta Layoffs?
Meta and Twitter job cuts have the same outcome — thousands of tech employees out of work. But these two billionaires handled company layoffs in vastly different ways.
While Zuckerberg and Musk both used email as their medium of communication, the similarities end there.
Twitter employees filed a class action lawsuit alleging Twitter violated federal and state laws by failing to give proper notice before termination. California's WARN Act and the federal Worker Adjustment and Retraining Notification Act both require 60 days advance notice when conducting layoffs at this scale.
Twitter employees were left with little in the way of compensation or support after layoffs. While staff was initially told they would receive the same severance pay and benefits they would have received under Twitter’s previous ownership — two months’ severance or more, based on years of employment — Musk told employees they would get only one month’s severance pay.
Zuckerberg outlined the support offered to affected employees in his letter, which includes:
- Four months’ severance pay, plus two additional weeks for each year of employment.
- Health insurance for employees and family coverage for six additional months.
- Access for three months to external career services support.
- Immigration support for those on a visa.
One other critical difference between the two approaches? Accountability. In the case of Twitter, Musk has laid blame on anyone and everyone for its current state but the closest he has come to acknowledging his own part in the current chaos came in the form (appropriately enough) of a tweet.
Zuckerberg, by contrast, wrote this line in his letter announcing the layoffs to Meta staff: "I want to take accountability for these decisions and for how we got here." While a passing line in a statement is unlikely to soften the blow of losing your job, it can impact the responses employees have to layoffs.
Related Article: CEOs: Should You Really Be Publicly Weighing in on Layoffs?
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Other notable layoffs include:
- Snap laid off 1,000 employees — 20% of staff
- Stripe eliminated 1,100 jobs — 14% of staff
- Coinbase cut 1,100 workers — 18% of staff
- Shopify laid off 1,000 employees — 10% of staff
Netflix, Microsoft, Lyft, Robinhood, Tesla and others have also seen company-wide staff cuts.
Many of these tech companies fell into the same trap as Meta, assuming that growth caused by the pandemic would continue. They hired more employees based on that assumption of constant growth.
Now tech companies are watching as digital advertisers cut back on budgets and consumers reduce spending due to inflation. With revenue dipping, companies are looking to cut costs. And labor spending is unfortunately the often first place they turn to.
Related Article: Have You Considered These Alternatives to Layoffs?
How Do You Deal With Layoffs the Right Way?
Layoffs are never easy. They're painful — this is directly impacting people's lives, and not only those laid off. But there are opportunities to ease the burden on staff.
Create a Layoff Training Program
Firing people is hard, whether one person or 1,000. So why is it not something taught to and practiced by management more often? “It’s not like it’s one script you read for every single employee because every employee, letting them go means something different,” said Bev Kaye, founder and CEO of BevKaye&CO and author of many books including, “Love ‘Em or Lose ‘Em: Getting Good People to Stay.”
Leadership should have a plan in place for what employee termination will look like — at an individual and group scale. It’s also essential for managers to stick to those policies and remain objective if the time for layoffs comes.
Communicate Layoffs Quickly and Clearly
Employees shouldn’t be left in the dark about what’s happening with their jobs. “How you communicate a layoff is one of the most critical parts of managing employee expectations and mitigating risk,” said Eric Monchnacz, senior consultant at Red Clover HR.
Zuckerberg “was proactive in communicating severance packages and post-action support his employee would receive,” said Mochnacz.
"There are fewer details about how he communicated the layoffs," he added, "but based on my observations on LinkedIn (which are anecdotal and just a small portion of the 11,000 laid-off employees), impacted employees are reacting more favorably to how they learned of the layoffs. They are speaking positively of their experience."
Take Ownership of the Problem
When it comes to company layoffs, leadership must take ownership of the situation — it’s the only way forward to a speedy recovery. It’s not the time to play the blame game.
Zuckerberg achieved this in his letter to Meta staff, with his acknowledgement of accountability and with his apologies to the employees impacted.
Show Empathy and Appreciation
Companies should aim for “elegant exits,” where managers show empathy for employees, express appreciation for their work and take an active interest in where their career will progress, said Kaye.
There are a lot of boomerang employees, she added, meaning workers who come back later. “And they will only return if the exit was well done.”
In Twitter’s case, Musk has already asked some fired Twitter employees to return.
What this indicates, said Mochnacz, is that “Musk wasn't clear in his business case for the terminations and didn't evaluate business continuity when he made his decisions — and he should have been more methodical in understanding the individuals were part of the critical path to the business's success.”
Offer Career Transition Support
Help employees move forward with their careers despite having to move on. Again, Meta scores a point here. Zuckerberg expressed concern for employees and their livelihoods, offering career support services through a third-party company.
Other ways companies can support employees is through:
- Redeployment opportunities.
- Outplacement services.
- Severance packages.
- Continued healthcare benefits.
- Allow employees to grieve.
Losing a job, especially one you’ve been at for years, is a significant life change. Mochnacz recommended giving employees the resources to deal with the emotions caused by that change.
“Impacted employees are right to have emotional reactions,” said Mochnacz. “They should be given the space to work through those emotions with someone from the company — and have any of their questions answered.”
Someone shouldn’t have to process the event on social media or with an employment lawyer, he added.
HR Lessons From Twitter, Meta and Other Tech Brands
Twitter and Meta layoffs are two extreme versions of what is happening across the tech industry and beyond.
HR leaders should study these two case studies for lessons in what to do — or what to avoid — when it comes to layoffs at your own company.
About the Author
Michelle Hawley is an experienced journalist who specializes in reporting on the impact of technology on society. As a senior editor at Simpler Media Group and a reporter for CMSWire and Reworked, she provides in-depth coverage of a range of important topics including employee experience, leadership, customer experience, marketing and more. With an MFA in creative writing and background in inbound marketing, she offers unique insights on the topics of leadership, customer experience, marketing and employee experience. Michelle previously contributed to publications like The Press Enterprise and The Ladders. She currently resides in Pennsylvania with her two dogs.