How Mark Zuckerberg Leads Meta Into Its Next Phase

SAN FRANCISCO — Mark Zuckerberg, the founder and chief executive of the company formerly known as Facebook, called his top social network lieutenants to a last-minute meeting in the San Francisco Bay Area this month. On the program: a “work-athon” to discuss the roadmap for improving Facebook’s main application, including a redesign that would change the way users navigate the service.

For weeks before, Mr. Zuckerberg had messaged his executives about the overhaul, urging them to increase the speed and execution of their work, people with knowledge of the matter said. Some executives – who had to read a 122-page deck of slides about the changes – were starting to sweat at an unusual level of intensity, they said.

Facebook executives traveled from around the world for the summit, the people said, and Mr. Zuckerberg and the group leaned into every slide. Within days, the team unveiled an update to the Facebook app to better compete with top rival TikTok.

Mr. Zuckerberg is setting a relentless pace as he steers his $450 billion business, which has been renamed Meta, into a new phase. Over the past few months, he’s cut spending, cut benefits, shuffled his management team and made it clear he’ll cut low-performing employees. Those not on board are being asked to leave, he said. Officials sent out memos expressing the seriousness of the approach — one, which was shared with The New York Times, was titled “Operating with Heightened Intensity.”

Mr Zuckerberg, 38, is trying to move his business away from its social media roots and center it on the immersive – and so far theoretical – world of the so-called metaverse. Across Silicon Valley, he and other leaders who built what many are calling Web 2.0 — a more social, app-driven version of the Internet — are rethinking and shaking up their original vision after their platforms have been plagued by privacy issues, toxic content and misinformation. .

The timing is reminiscent of other company bets, like when Netflix killed off its DVD shipping business the past decade to focus on streaming. But Mr. Zuckerberg makes these moves because Meta’s back is against the wall. Society is staring into the barrel of a global recession. Competitors like TikTok, YouTube and Apple are collapsing.

And success is far from guaranteed. In recent months, Meta’s profits have plummeted and revenue has slowed as the company has spent lavishly on the Metaverse and the economic downturn has hurt its advertising business. Its stock plunged.

“When Mark is focused on something, everyone at the company is on deck,” said Katie Harbath, former Facebook policy director and founder of Anchor Change, a consulting firm that works on questions of technology and democracy. “Teams will quickly drop other work to focus on the problem at hand, and the pressure is intense to move quickly to show progress.”

Meta declined to comment. The company plans to release its quarterly results on Wednesday.

Mr. Zuckerberg’s repositioning of Meta began in earnest last year, when he began revamping his bench of lieutenants.

In October, he elevated longtime friend and colleague Andrew Bosworth, known as Boz, to Chief Technology Officer, leading hardware efforts for the Metaverse. He promoted other loyalists as well, including Javier Olivan, the new general manager; Nick Clegg, who became president of global affairs; and Guy Rosen, who has taken on a new role as Chief Information Security Officer.

In June, Sheryl Sandberg, who was Mr. Zuckerberg’s No. 2 for 14 years, said she would step down this fall. While she spent more than a decade building Facebook’s ad systems, she was less interested in doing the same for the Metaverse, people familiar with her plans said.

Mr. Zuckerberg has moved thousands of workers into different teams for the Metaverse, training them on ambitious projects such as hardware glasses, wearable devices, and a new operating system for those devices.

“It’s an existential bet on where people over the next decade will connect, express themselves and identify with each other,” said Matthew Ball, a longtime technology executive and the author of a metaverse book. “If you have the money, the engineers, the users and the belief to get started, then you should.”

But the efforts are far from cheap. Facebook’s Reality Labs division, which builds augmented and virtual reality products, weighed on the company’s balance sheet; the hardware unit lost nearly $3 billion in the first quarter alone.

At the same time, Meta is grappling with privacy changes from Apple that have hampered its ability to measure the effectiveness of ads on iPhones. TikTok, the Chinese-owned video app, has been stealing young audiences from major Meta apps like Instagram and Facebook. These challenges coincide with a brutal macroeconomic environment, which has caused Apple, Google, Microsoft and Twitter to freeze or slow down hiring.

So, Mr. Zuckerberg kick-started his business with a strong message: It’s time to do more with less.

This month, Meta lowered its engineering hiring target for the year to 6,000 from 10,000 to 12,000 and said it would leave some vacancies vacant. Budgets that were once big are being squeezed and managers have been told not to expect an unlimited number of employees for their teams. In a note last month, Chris Cox, chief product officer of Meta, said the economic environment was calling for “leaner, meaner and better execution teams.”

In an employee meeting around the same time, Zuckerberg said he knew not everyone would agree with the changes. It was good, he told the employees.

“I think some of you might decide that this place isn’t for you, and self-selection is right for me,” Zuckerberg said. “In reality, there’s probably a bunch of people in the business who shouldn’t be here.”

Another memo circulated internally among workers this month was titled “Operate with increased intensity.” In the memo, a VP of Meta said managers should start “thinking about every member of their team and the value they add.”

“If a direct report is coasting or underperforming, we don’t need them; they are dropping this business,” the memo reads. “As a manager, you can’t allow someone to be net neutral or negative for Meta.”

Mr. Zuckerberg is focusing the efforts of those left behind on areas that he believes will benefit Meta the most in the long run. These include the metaverse, messaging, Instagram Reels, privacy, artificial intelligence, and higher revenue from products that currently earn little or nothing, according to the memo from Mr. Cox, which described six “investment priorities” for the company in the second half of this year.

Meta is stepping back in some areas, including low-selling products like the Portal video chat device, which will no longer be offered to consumers and will instead be aimed at businesses. Mr Bosworth has also halted development of a dual-camera smartwatch, according to people with knowledge of the matter, although the company is working on other prototypes. Bloomberg reported earlier on the smart watch.

Just days after the “work-athon” with Facebook managers this month, Mr. Zuckerberg posted an update to his Facebook profile, noting some upcoming changes to the app. Facebook would start pushing people to a more video feed with more suggested content, mimicking how TikTok works.

Meta has invested heavily in video and discovery, aiming to boost its artificial intelligence and improve “discovery algorithms” that suggest engaging content to users without them having to work to find it.

In the past, Facebook has tested major product updates with a few English-speaking audiences to see how they worked before rolling them out more widely. But, this time, the 2.93 billion people worldwide who use the social networking app will get the update simultaneously.

It’s a sign, some Meta employees said, how serious Mr. Zuckerberg is.

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