Over the weekend, it leaked that Facebook’s parent company, absurdly named Meta after its worst-performing division, may be planning mass layoffs in hopes of saving the social media firm from its one-year collapse of nearly 75 percent in market capitalization.
In other words, Facebook is getting Twitterized. No longer will its 87,000 employees automatically continue to live a six-figure lush life while hobnobbing with deep-state bureaucrats and deciding who can say what to whom.
The news underscores the point: Twitter’s 50 percent cuts aren’t a result of Elon Musk’s desire for retribution against the staff but an economically necessary shift to get the company on a profitable footing. Facebook must also face the music.
![(Data: Federal Reserve Economic Data [FRED], St. Louis Fed; Chart: Jeffrey A. Tucker)](/_next/image?url=https%3A%2F%2Fimg.theepochtimes.com%2Fassets%2Fuploads%2F2022%2F11%2F07%2F1-JAT-2022.11.07-1200x541.png&w=1200&q=75)
This is becoming an industry norm for all the Big Tech companies that flew so high during the lockdown period but also became massively bloated over the previous decade. Interest rates were so low and the money flowed so freely that they were in a position to neglect economic rationality.
At some point, it just didn’t seem to matter anymore. No matter how much they spent, there was always more money, more success, more capital available, and more enthusiasm for their product.
Under these conditions, any CEO and any management team would come to believe in their own infallibility. Poor management? Surely not: Just look at our stock price and growing staff!
That’s also when those firms started dabbling in strategies and actions that have nothing to do with serving customers and stockholders. This is how these companies came to embrace various social-justice causes such as ESG (environmental, social, and governance) and DEI (diversity, equity, and inclusion) while neglecting actual business and normal standards of profitability.
It’s also how the companies blew up in size beyond all rational standards.
We need equity! Get an equity department.
We need accessibility! Get an accessibility team.
We need transparency! Get a transparency team.
We need diversity! Hire more diversity people.
Name any fashionable management/business buzzword and there’s a new team for it. And who populates these teams? Just get some kids with some impressive resumes, ideally with some Ivy bling in there somewhere. That will surely impress investors.
Then came the lockdowns, which were tailor-made to reward these companies even more. People’s businesses, schools, recreation, churches, civics clubs, and even house parties were closed by government decree and a huge portion of the population was condemned to forced idleness. Digital tech boomed again!
These companies were well-positioned to permit the whole of their staff to “stay home and stay safe.” Wow, life just couldn’t get any better! They were doing not much of anything at the office and still pulling in six figures. Now, they could do even less at home and make the same amount of money. Adding to the glorious utopia of lockdowns, the government started giving everyone, regardless of income or need, thousands of dollars straight into their bank accounts!
Life just couldn’t get better! But, hey, that’s the reward you get when you’re at the cutting edge of digital magic, information economics, and the magical monetization of attention. Brain waves themselves can be commoditized; you can read about it in a techy management book at the airport.
It felt like a post-scarcity world, or even better: a post-constraint world that was minting geniuses as fast as the Federal Reserve could print money.
During the lockdown periods, millions of people figured out great tricks for bamboozling the boss into thinking the work is arduous when, in fact, they were binging on Netflix or keeping warm the seat of their Peloton, which was taking them on imaginary journeys hither and yon. The best tool is called the “mouse jiggler,” which you can snag from Amazon for $12 and have some unlucky slob deliver it to your door by nightfall. It keeps the computer active so that the Slack/Teams notifications report that you are a busy beaver.
Then came the great censorship. These companies were so flush with cash that they thought there was no downside and plenty of upside to cooperating with government to crush opinions that contradicted regime priorities. Kids from Harvard working at Facebook developed tight relationships with career bureaucrats at the CDC/NIH/FEMA/DHS and it felt great. It’s a war on misinformation.
Just one problem: It required that they completely betray the people who are creating the product they are selling, namely their users. For years, platforms such as YouTube, Twitter, Facebook, Instagram, LinkedIn, and Amazon had urged their users to expand their network, build their audiences, reach more people, upload and notify all their contacts, and grow grow grow. And so people did, hoping to join the ranks of the influencers and partake in the largess of infinite riches.
However, the war on misinformation required that these companies completely undermine their previous promises to users themselves. These companies blew up networks all over the place in the name of enforcing high standards of public health.
To be sure, the companies had a self-interest in doing this. The longer the lockdowns lasted, the richer they became. The longer the schools were closed, the more their “learning tools” had a market. The longer government enforced “social distancing” the more people would be forced to turn to digital products for human connection.
Then, Mark Zuckerberg had a brilliant idea: Let’s create an entire world of fake things and fake people doing fake activities and allow access only through a headset that we sell! For some reason, and maybe only because he’s the boss, people pretended that he was right. Then the entire company heavily invested in this metaverse and even renamed the company Meta. Sadly for him, no one showed up.
Looking back, it’s all madness.
I’ve felt schadenfreude over all these layoffs, but we should remember that very good people are being axed at an extremely hard time in the labor markets. Despite what the Biden administration claims, they aren’t strong in any of the sectors in which the layoffs are happening. Job markets are strong in positions that actually require working.
In a few months, millions of these tech workers are going to be hitting the job market at the same time. If they find a new position in their profession, it’s going to be at a lower salary. It will require a geographic move and even then, workers have to commute to the office. And bosses are now starting to get wise to the goofing-off racket. In other words, we’re seeing the return of honesty and economic rationality and perhaps even the work ethic.
The transition won’t be easy.
Once the dust settles, it will become clear that the real problems in this sector began not with lockdowns but in 2008 with zero-interest policies that made capital far cheaper than the market would otherwise allow and encouraged a degree of leverage that would prove unsustainable. It was Fed policy that unleashed all this mania.
This point pertains not only to corporate tech but also media and especially government itself. It was all an illusion. And it seems all to be coming crashing down at all levels of society.
