They're not actually finding the bottom 5%, they're giving managers an excuse to get rid of people the don't like for whatever reason.
It's also terrible for morale to do it all at once. Sure, maybe there are some underperformers. Let managers deal with those people individually. Don't do a mass layoff where they have to select someone at a specific time when all their people might be doing well.
More insidious is the rankings are capricious and arbitrary despite haughty claims. Unless you're in the top quintile and know so explicitly you can never feel safe in your position. You can also drop into the bottom quintile of the stack for no other reason than someone else on your team self aggrandized a bit more right before reviews.
Say you fire 5% now, then another 5%, and another, and so on. Obviously, you'll still hire, so you can argue that not everyone will be fired, but you could potentially just be firing/pushing out all the people you have today over the next X years to replace them with what you believed to be better employees. However, those newer employees are not the ones that got you to where you are today where you make so much money that you can liberally fire "the bottom 5%". It feels like a bit of a paradox.
At some point, it's worthwhile to step back and ask if maybe the system is broken. The constant hiring/culling cycle is ruthless way to wring out performance from people who are already likely overperforming in the industry.
>Say you fire 5% now, then another 5%, and another, and so on.
sounds a bit like Zeno's paradox, or one of them.
I understand that people don't like any talk about layoffs and performance management, but I've never worked at a company where being in the bottom 5-10% of performers meant your job was safe. I've also never worked at a big company that didn't have at least 1-in-20 people who were clearly underperforming and everyone around them knew it.
I know the real complain is that he said it out loud and people don't like threats. However, Meta employees are highly compensated, especially now that the stock price is extremely high. I don't really think it's unreasonable for a company that compensates well and has generous severance packages to be cutting the bottom 5% of their workforce.