Aditya Narayan Mishra: Meta needs little more injection of innovation: Aditya Narayan Mishra
If you go through Mark Zuckerberg’s statement and actually it is communicated to Meta employees that he has put out on Facebook, citing transparency. He keeps talking about flattening the workspace and flattening the work models, what it seems like lesser managers, fewer layers. Do you think that is a direction that a lot of companies in this space globally and here in India are also going to take?
Yes, I think so, that is one of the smart ways of delayering the organisation and getting the productivity up. But this may not be the long-term solution to the challenges that they are facing, because in my mind the challenge is about stagnating revenues, advertisers going into different product platforms other than what Meta is offering, that is the core of the issue. Of course, the second one is about the overhiring that they had done in anticipation of a huge upswing of revenues. So, the first piece, they did a huge layoff, trying to correct the cost structures. Now the second time that they are doing in a major scale is to de-layer the organisation. But after you have delayered the organisation, sometimes this becomes very difficult to manage when the organisation is of huge size with so many different units.
What I do not understand is that this company laid off 13% of its workforce four months ago. So, one of two things, either they did not figure out how many people they need to let go or the situation has worsened in the last four months. Which one in your view is it?
I think the situation has not improved. They were still thinking that advertisers’ revenue will go up, but it has not, so that is the main issue. And to some extent, that they did not want to fire at one go because the headcount of the organisation has grown up by about 50% over the last two years, so at one go if they do such a huge layoff, from an optics perspective, it does not look good and the stock would have possibly been beaten a lot more significantly, that is why possibly they had to do it in phases.
The other sort of interesting noteworthy parts of that letter, one is the insistence of let us please work face to face, it builds trust, so a clear signal that you are moving away from remote working, work from home, all of that is ending at one of the largest tech companies in the world and also a reorientation and alignment to being a tech company led by engineers.
Yes, it does provide that signal. I feel some of it is also to manage the perception of the market, the investors, about Meta as a platform. So, they are possibly trying to kind of build a perception amongst investors and amongst many other stakeholders that things will become better. The interventions today are going to give them results. So, it is also more about how do you manage the expectations of others of Meta. But I think the main issue is, like I said, the product itself, it is now fairly mature product. It needs little more injection of innovation, something new, which will appeal to the mass. I think that is the main issue that they need to figure it out. If this delayering really helps them, sometimes it does, innovation becomes easier when the organisation gets delayed; however, it needs careful navigation. I hope that Meta is able to navigate that.
