Meta Platforms (META) Tightens Performance Standards Just Months after Huge Layoff

Social media company Meta Platforms (META) is asking its managers to rate more employees as low performers in this year’s mid-year performance reviews, just months after laying off nearly 4,000 workers for similar reasons. According to a memo seen by Business Insider, teams with 150 or more people are now expected to place 15% to 20% of employees in the “below expectations” category, compared to 12% to 15% last year. This group also includes employees who have already left the company through what Meta calls “nonregrettable attrition.” These are workers who resigned or were let go and are not considered critical to operations.

The memo describes the review process as a chance to make decisions about who should leave, though Meta says there won’t be a company-wide round of firings like earlier this year. Instead, managers are expected to handle these decisions individually. Employees can be selected for cuts based on factors like a “below expectations” rating, any formal discipline in the past six months, or if they had a performance plan earlier this year. The reviews will begin on June 16, with meetings between managers and employees scheduled from July through August.

It is worth noting that this move is part of Meta’s ongoing effort to raise performance standards and reshape its workforce after years of overhiring. Indeed, CEO Mark Zuckerberg has made it clear that he wants to act faster in removing low performers in order to make room for stronger talent. And other tech companies are doing the same. In fact, Microsoft (MSFT) recently announced job cuts that were aimed at reducing middle management, and Google (GOOGL) has trimmed its top leadership ranks in order to boost efficiency.

Is Meta a Buy, Sell, or Hold?

Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 41 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $696.12 per share implies 9.1% upside potential.

See more META analyst ratings