I feel like people over-index on the idea of "fiduciary responsibility to shareholders." I don't think most decisions a CEO makes are really done with shareholders specifically in mind. They do what is best for the company --for its health, growth, and sometimes survival-- and shareholders are just there for the ride. Certainly, there are some executive decisions where shareholders are the primary factors, but by and large I think they're an afterthought at best.
He over-hired, he lost faith in the direction of a big chunk of Meta's initiatives, and he now wants to pare back.
To me the phrase almost is a moral shorthand for capitalism. A corporation has no inherent right to life or survival instinct the way a person does, and the phrasing and pretense of "duty to shareholders" is used to give it one by proxy. Does that make sense? So rephrasing my original post, it would be something like "We all agree it's moral to seek profit, since that's the economic system that seems to work, and his actions can be seen as in line with that, so therefore if you agree capitalism makes sense, his actions are justifiable and moral".
It’s not like the workforce just appeared out of nowhere. They were hired by the same management who is now firing them.
Ultimately society has to choose where it wants to be on the spectrum between difficult to hire and difficult to fire, and easy to hire and easy to fire (workers can also unionize to push things further towards the “difficult” end).
Teams and individual were hired for projects and roles that management doesn't now think will work. Keep everyone on-board indefinitely? Doing... what, exactly?
So many of the large companies today are one trick ponies trying to milk their singular profit center to the nth degree instead of diversifying into new niches.
Meta failed spectacularly in the direction they did try- but ultimately, like Google, even that (VR) was a way to expand their advertising business, rather than truly expand their footprint.
Apple seems the singular Silicon Valley company truly able to find new niches and expand their competencies. I do wish they'd stuck with Jobs original obstinate insistence of not paying dividends- it was a forcing function to keep them actively investing that cash into new ventures.
The officers of a company (CEO, etc) are caretakers of that property on behalf of the shareholders.
If you own a Pizza Hut, and you hire someone to manage and run the store, their job is to make sure the store (and thus you) make a profit. The CEO has the same obligation to shareholders.
https://en.wikipedia.org/wiki/Friedman_doctrine
It was actually cooked up in the 70s by Milton Friedman, and over the ensuing few decades it's gone so viral that even its opponents think it's true.
Companies have a responsibility not to just annihilate the shareholders' money for no reason whatsoever, but they have a LOT of leeway to make risky investments or go off on tangents. Executives are NOT legally or morally required to screw people over for an extra short-term buck.
I saw nothing in the Friedman doctrine that says anything about prioritizing short term results.
But if the company doesn't do what the shareholders want, the shareholders sell, and the stock price goes down.
That's not remotely true. Stock prices are based on long term fiscal results. If shareholders get a whiff of a company sacrificing long term results for short term profits, the share price tanks.
Founders generally do what's best for the company (or try to). There are enough infamous CEOs that clearly did what's best for themselves.
Zuckerberg can try to hoard cash to acquire the next Instagram or YouTube, but I don't think it's going to work; it's risky. That's not what Apple did. It's not what Microsoft did.
Companies will claw back your signing bonus if you quit within the first year. It seems eminently reasonable to me that a profitable company should be legally liable to pay you at least your signing bonus, if not full severance or even your first year's salary, if they pull your offer right before the start date. That $x00k doesn't matter one whit to $META but it will very likely be a source of existential crisis for the family who planned their lives around it.
That doesn't make too much of a difference. If anything, it makes his duty to the rest of the shareholders more important. (In a legal sense.)
> It seems eminently reasonable to me that a profitable company should be legally liable to pay you at least your signing bonus, if not full severance or even your first year's salary, if they pull your offer right before the start date.
You are free to negotiate for such a clause in your contract. And to refuse contracts that don't have this clause.
You seem to have missed the post you’re responding to’s point, since it’s making the exact point that you can’t do this; due to power disparity.
They will coerce you into mostly unenforceable non-competes and 2yr window signing bonus stipulations to scare tactic you into being a “loyal” cog, but will do nothing if you sign a contract, move half way across the country, change your entire livelihood and then decide to pull your employment offer at the last moment. And you can’t do a damn thing about it, unless you’re a .1% top engineer. That’s literally the definition of a power imbalance.
If you want to stubbornly die on your lonely hill go for it. I'm not interested in further conversation with you, sorry.
Sustainable? I doubt it. Rescinding signed offers before people start is a very bad practice. If that's the trend, and they ever ask me to work for Meta, I'll want a clause like "we won't lay you off before 6 months". I'm totally ok if I don't pass probation, or if some shit happens when I'm there, but not even starting (so I cannot put "Meta" on my resume and I don't get severance) is just as if the offer was never signed.
So a company is responsible to those few owners and that is it.
For example, Mark is the biggest shareholder in Meta with 16.8% of shares in 2021. Together with 2 other biggest shareholders they own over 30% of the company.
For less drastic decisions where holders of 50%+1 or 2/3 of shares is enough agreement of board members and few more shareholders is often enough.
And even with less skewed share distribution views of shareholders are very broad and the board does not have troubles to form the necessary majority.
Surely shareholders coups are possible, but those are rare.
If staff reductions are necessary, there are ways to do them within a reasonable amount of time without seriously hurting people and traumatizing everyone who's left at the company. Layoffs are bad for morale, bad for business.
Or you could look at employees like sheep or cattle to be herded and culled when it suits and when asked for justification, make completely tone deaf answers that show no compassion for the human costs of your actions, the actual points of the questions. See if your best people are still loyal and decide to stick around.
Anyone surprised that Zuckerberg seems devoid of empathy? The laid off people can live in the Metaverse until times get good again, right?
Sheryl was the one heading up the empathy department.
The problem is, these companies haven’t been hiring to their needs. Instead they have been competitively hiring to A) try to ensure they have the best talent and B) to overinflate their engineering trajectory as a means to pad their corporate value.
This is 100% the fault of the industry and not the employees and they should be held accountable. They’ve impacted near 100k people’s livelihoods with their self-interested and idiotic business moves. So I’m not interested in their fluff answers or “fiduciary duty”.
WTF? It is absolutely NOT justifiable and very much morally despicable to pull a job offer after the person has already quit their other job.
Stop internalizing corporate platitudes. The sooner you accept that the game is making money the sooner you can get yours and stop expecting your employer to owe you anything more than a paycheck for your work.
I don't think Mark's answers are necessarily unfair either, he's running a business after all. He does have a fiduciary responsibility to shareholders, even if that means making difficult staffing decisions (still true even if they were his fault to begin with by over-hiring). Ultimately you agree to participate in this framework by accepting a job at a public company.
But there is a point after which it becomes distasteful. It gives me the same sort of feeling as those stories about companies pulling offers right before the start date, after an employee has quit their previous job. Legal? Yes. Justifiable? No doubt. Morally? It's grey. And it leaves a sour taste. On an individual level, it's the kind of thing that is punished in the long run, through reputational damage. In an ideal world I would like to see companies face something similar.