How Mark Zuckerberg leads the dead to its next stage

SAN FRANCISCO — Mark Zuckerberg, founder and CEO of the company formerly known as Facebook, invited his top aides for the social network to a last-minute meeting in the San Francisco Bay Area this month. On the agenda: “work-athon” to discuss a roadmap for improving the main Facebook app, including a revamp that would change how users browse the service.

Weeks before that, Mr. Zuckerberg had sent letters to his executives about overhauling, and pressured them to increase the speed and execution of their work, people familiar with the matter said. And they said some executives — who had to read a 122-page slide set about the changes — started sweating an unusual level of intensity.

Facebook leaders came from all over the world for the summit, people said, and Mr. Zuckerberg and the group were filling out every slide. Within days, the team unveiled an update to the Facebook app to take on its top competitor, TikTok.

Mr Zuckerberg sets an unrelenting pace as he directs his $450 billion company, renamed Meta, into a new phase. In recent months, he has reined in spending, slashed perks, made adjustments to his leadership team and made clear he would cut low-performing employees. He said those not on board are welcome to leave. Directors sent memos to express the seriousness of the approach—one, shared with the New York Times, was titled “Working with Increasing Intensity.”

Mr. Zuckerberg, 38, is trying to push his company away from its social networking roots and focus on the immersive – and hitherto theoretical – world of the so-called metaverse. Across Silicon Valley, he and other executives who built what many refer to as Web 2.0 — a more social and app-focused version of the Internet — are rethinking and tweaking their original vision after their platforms were plagued by privacy stumbles, toxic content, and disinformation.

The moment is reminiscent of other company bets, like when Netflix discontinued its DVD business in the last decade to focus on streaming. But Mr. Zuckerberg makes these moves as he appears dead facing a wall. The company is staring at the barrel of a global recession. Competitors such as TikTok, YouTube and Apple are pressing.

And success is far from guaranteed. In recent months, Meta’s earnings have slumped and revenue has slowed as the company has spent generously on the metaverse and because the economic slowdown has hurt its advertising business. Its stock is down.

“When Mark is so focused on something, everything becomes practical within the company,” said Katie Harpath, a former Facebook policy director and founder of Anchor Change, a consulting firm that works on technology and democracy issues. “Teams will quickly abandon 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 announce quarterly earnings on Wednesday.

Zuckerberg began rearranging meta in earnest last year, when he began rearranging his seat of assistants.

In October he promoted longtime friend and colleague Andrew Bosworth, better known as Bose, to chief technology officer, leading the hardware effort for the metaverse. He also promoted other loyalists, including Javier Oliván, the new chief of operations; Nick Clegg, who became head of global affairs; and Jay Rosen, who has taken on a new position as Information Security Officer.

In June, Sheryl Sandberg, who has been Zuckerberg’s No. 2 for 14 years, said she would be stepping down this fall. Although it spent more than a decade building Facebook’s advertising systems, it was less interested in doing the same with the metaverse, people familiar with its plans said.

Zuckerberg has transferred thousands of workers to different teams for the metaverse, coaching their focus on ambitious projects like hardware eyewear, wearable devices, and the new operating system for those devices.

“It’s an existential bet on where over the next decade people will connect, express and get to know each other,” said Matthew Ball, a longtime tech executive and author of a book on the metaverse. “If you have the money, the engineers, the users, and the conviction to swing it, then you have to.”

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

Meanwhile, Meta is grappling with privacy changes from Apple that have hampered its ability to measure the effectiveness of ads on iPhones. The Chinese video app, TikTok, has stolen young fans from core Meta apps like Instagram and Facebook. These challenges coincide with a brutal macroeconomic environment, which has prompted Apple, Google, Microsoft and Twitter to freeze or slow hiring.

So, Mr. Zuckerberg pushed his company to overdo it with a powerful message: It’s time to get more done with fewer resources.

This month, Meta lowered its engineering hiring targets for this year to 6,000, from 10,000 to 12,000, and said it would leave some job openings vacant. Budgets that were once full are slashed, and managers are told not to expect an unlimited number of employees for their teams. In a note last month, Chris Cox, chief product officer at Meta, said the economic environment requires ” leaner, leaner, and better executive teams.”

In a meeting with an employee around the same time, Zuckerberg said he knew not everyone would be willing to make the changes. He told the staff that this was fine.

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

Another memo circulating internally among workers this month is titled “Working with Increasing Intensity”. In the memo, the vice president of Meta said managers should start to “think about everyone on their team and the value they add.”

“If the direct report is fast or underperforming, they are not who we need; they have failed this company,” the memo reads. “As a manager, you cannot allow anyone to be neutral or negative in the Meta.”

Mr. Zuckerberg is focusing the efforts of those who remain in areas he believes will benefit Meta most in the long run. These include the metaverse, messaging, Instagram Reels, privacy, artificial intelligence, and higher returns from products that currently bring in little or nothing, according to Mr Cox’s note, which outlined six “investment priorities” for the company in the second half of this year.

Meta is declining in some areas, including lower selling products like the Portal video chat device, which will not be offered to consumers and will instead target businesses. Mr Bosworth has also halted development of a dual-camera smartwatch, according to people familiar with the matter, even though the company is working on it. Other models. Bloomberg reported earlier on the smartwatch.

After just days of “work-athon” with Facebook administrators this month, Zuckerberg posted an update to his Facebook profile, noting some upcoming changes to the app. Facebook will start pushing people to a thicker video feed with more suggested content, to simulate how TikTok works.

Meta invests heavily in video and discovery, with the goal of enhancing its artificial intelligence and improving “discovery algorithms” that suggest engaging content to users without having to work to find it.

In the past, Facebook tested major product updates with a small number of English-speaking audiences to see how they performed before rolling them out more widely. But, this time around, 2.93 billion people around the world who use the social networking app will receive the update simultaneously.

Some Meta employees said it was a sign of how important Mr Zuckerberg was at work.

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