How Mark Zuckerberg is taking Meta to its next phase

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

Weeks earlier, Mr. Zuckerberg had sent messages to his executives about the overhaul, urging them to increase the speed and execution of their work, people familiar with the matter said. Some executives, who had to read a 122-page presentation about the changes, began sweating at the unusual intensity, they said.

Facebook executives flew in from around the world for the summit, people said, and Mr. Zuckerberg and the group pored over each slide. Within days, the team rolled out an update to the Facebook app to better compete with a top rival. tick tock.

Mr. Zuckerberg is setting an unrelenting pace as he steers his $450 billion company, renamed Meta, into a new phase. In recent months he has reined in spending, trimmed perks, changed his management team and made it clear that he would do it cut underperforming employees. Those not on board are welcome to leave, he said. Managers have sent out memos to convey the seriousness of the approach - one shared with the New York Times was titled "Operating With Increased Intensity".

Mr. Zuckerberg, 38, is trying to push his company away from its social media roots and focus it on the immersive — and previously 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, apps-focused version of the Internet — are rethinking their original vision after their platforms have been plagued privacy stumblestoxic content and misinformation.

The moment is reminiscent of other bet-the-company gambles, such as when Netflix shut down its DVD mail order business over the past decade to focus on streaming. But Mr. Zuckerberg takes those steps while Meta's back is against the wall. The company is staring into the barrel of a global recession. Competitors like TikTok, YouTube and Apple are pushing down.

And success is anything but guaranteed. in the last few months, Meta's profits have dropped and revenue has slowed as the company has lavishly spent on the Metaverse and the economic slowdown has hurt its advertising business. His stock has crashed.

"When Mark focuses on something, the company gets very busy," said Katie Harbath, a former Facebook policy director and founder of Anchor Change, a consultancy specializing in technology and democracy issues. "Teams will quickly drop other work to focus on the problem at hand, and there's a lot of pressure to act quickly to show progress."

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

Mr. Zuckerberg's meta repositioning began in earnest last year when he began reshuffling his bank of lieutenants.

In October, he raised a longtime friend and colleague, Andrew Bossworth, known as Boz, as the chief technology officer leading the hardware effort for the Metaverse. He promoted also other loyalists, including Javier Olivan, the new chief operating officer; Nick Clegg, who became President for Global Affairs; and Guy Rosen, who assumed a new role as chief information security officer.

In June, Sheryl Sandberg, who was Mr Zuckerberg's No. 2 for 14 years, said she will step down this fall. While she spent more than a decade building Facebook's advertising systems, she was less keen on doing the same for the metaverse, people familiar with her plans said.

Mr. Zuckerberg has moved thousands of employees to different teams for the Metaverse, cultivating their focus on challenging projects such as hardware glasses, wearables, and a new operating system for those devices.

"It's an existential bet on where people will connect, express themselves and identify over the next decade," said Matthew Ball, a longtime technology executive and author of a Book about the Metaverse. "If you have the money, the engineers, the users and the conviction to go for it, then you should do it."

But the effort is far from cheap. Facebook's Reality Labs division, which makes augmented and virtual reality products, has dragged down the company's balance sheet; In the first quarter alone, the hardware division lost nearly $3 billion.

At the same time, Meta is struggling Apple Privacy Changes which have hampered its ability to measure the effectiveness of ads on iPhones. TikTok, the Chinese video app, has stolen a young audience from Meta's core apps like Instagram and Facebook. These challenges coincide with a brutal macro environment that has prompted Apple, Google, Microsoft and Twitter to freeze or slow down recruitment.

So Mr. Zuckerberg kickstarted his business with a powerful message: It's time to do more with less.

This month, Meta lowered its engineering hiring targets for the year to 6,000 from 10,000 to 12,000 and announced it would leave some open positions unfilled. Budgets that were once thick are being slashed, and managers have been told not to count on unlimited staff for their teams. in the a note Last month, Meta's chief product officer, Chris Cox, said the business environment calls for "leaner, meaner, and better-executing teams."

At a staff meeting around the same time, Mr. Zuckerberg said he knew not everyone would be on board for the changes. That's fine, he told employees.

"I think some of you might decide that this place isn't for you and that self-selection is fine with me." said Mr. Zuckerberg. "Realistically, there's probably a lot of people at the company who shouldn't be here."

Another memo circulated internally among workers this month was titled "Working at increased intensity." In the memo, a Meta vice president said managers should start "thinking about each person on their team and the value they add."

“If a direct employee is idle or underperforming, they are not who we need; They're letting this company down," the memo said. "As a manager, you cannot allow anyone to be net neutral or negative for meta."

Mr. Zuckerberg is focusing the efforts of those who stay on areas that he believes will benefit the meta the most over the long term. These include the metaverse, messaging, Instagram Reels, privacy, artificial intelligence and increased revenue from products that currently bring in little to nothing, according to Mr Cox's memo, which lists six "investment priorities' for the company in the second half of this year.

Meta is retreating in some areas, including underselling products like the video chat device Portal, which is no longer offered to consumers and is instead targeting businesses. Mr. Bosworth has also halted development of a dual-camera smartwatch, according to people familiar with the matter, although the company is working on it other prototypes. Bloomberg reported earlier on the smartwatch.

Just days after this month's "workathon" with Facebook executives, Mr. Zuckerberg posted an update to his Facebook profile and hints at some upcoming changes in the app. Facebook would start pushing people into a more video-heavy feed with more suggested content, mimicking how TikTok works.

Meta has invested heavily in video and discovery to improve 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 some English-speaking audiences to see how they work before rolling them out more broadly. But this time, the 2.93 billion people around the world who use the social networking app will get the update at the same time.

It's a sign, some meta staffers said, of just how serious Mr. Zuckerberg is.

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