If you are working at Meta Platforms (META), you may want to polish your resume. New reports suggest that Meta is planning another set of layoffs this year, this time for the lowest-performing 5%. Investors, however, were not happy about this, and sent shares down around 2.5% in Tuesday afternoon’s trading.
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The new reports have Mark Zuckerberg himself saying that he’s “…decided to raise the bar on performance management and move out low performers faster.” Typically, Zuckerberg noted, such performance cuts are done over the course of a year, but now, it plans to do so much faster.
In fact, the report noted, Meta is out to reach “10% of non-regrettable attrition” by the end of the latest performance cycle. That includes the 5% of such attrition already reached in 2024, and would ultimately mean about 3,000 total layoffs. However, all is not lost; Meta will be providing “generous severance” for anyone laid off as a result of this latest batch.
An AI Replacement?
This news comes at an unexpected time for Meta, and a shockingly apt time at that. Because just a day ago, Mark Zuckerberg also brought out word saying that Meta was likely to be turning to AI for more of its programming work. In fact, based on a report from the Times of India, that will start this year, as Zuckerberg looks for artificial intelligence (AI) to be able to do the work of “midlevel software engineers” at some point this year.
Interesting that this is the same time that Zuckerberg plans to ramp up firings, is it not? And the idea makes a certain kind of sense; replacing everyone with AI is a recipe for failure. After all, there are many fields in which humans still do better than their machine counterparts. Further, not everyone being laid off is necessarily an engineer. But by getting rid of the lowest performers, these are the people who might be best replaced by AI. And Meta may have the AI ready to go.
Is Meta Platforms a Buy, Sell or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 40 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 61.68% rally in its share price over the past year, the average META price target of $689.12 per share implies 16.02% upside potential.
