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Google and Facebook CEOs warn slackers what it means

CEOs of Alphabet and Meta Platforms, parent companies of Google and Facebook and major heavyweights of the world of technologywarn underperforming employees to step it up, raising concerns about potential layoffs amid the continuous economic town center.

The US economy contracted from April to June for a second consecutive quarter, raising fears of an economic recession. Consecutive quarters of declining gross domestic product (GDP) are a traditional, though not definitive, measure of a recession.

“Whenever there’s a recession or a recession warning, companies start looking within and saying, how can we anticipate this?” Julie Bauke, founder and chief career strategist of the Bauke Group, told FOX Business.

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Bauke is one of several industry experts who told FOX Business that these warnings are indicators of a slowing labor market, including layoffs.

After a disappointing fiscal quarter, Mark Zuckerberg, CEO of Meta and Sundar Pichai, CEO of Alphabet both told staff members they had productivity issues and were “putting pressure” on staff performance management.

Meta's logo on a sign displayed outside the company's headquarters in Menlo Park, California

Meta Platforms is considering cutting the money it gives to news outlets as it reevaluates the partnerships it has entered into over the past few years. ((AP Photo/Tony Avelar, File)/AP Newsroom)

According to audio obtained by Reuters, Zuckerberg, whose company suffered its first revenue drop in history, told employees last week that his hope was to raise expectations and have more aggressive goals.

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“Just to turn up the heat a bit,” Zuckerberg said. “I think some of you might decide that this place isn’t for you, and self-selection is for me.”

Meanwhile, Pichai voiced similar concerns. Pichai reportedly told staff members last week that there were “genuine concerns that our productivity as a whole is not where it should be for the number of staff we have”. The comments were first reported by CNBC.

Google’s revenue growth in the last quarter slowed to its slowest pace in two years as advertisers limited spending amid growing fears of an economic recession. Second-quarter revenue grew 13% this year, compared to 62% in the comparable quarter last year.

Google

Google CEO Sundar Pichai speaks during the signing ceremony committing Google to help expand information technology education at El Centro College in Dallas, Texas on October 3, 2019. (REUTERS/Brandon Wade/Reuters Photos)

According to economist and Thru the Cycle president John Lonski, these notices are signals of potential layoffs, which could lead to higher unemployment, fewer available jobs, lower wage growth and fewer employment opportunities. employment in startups.

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“If there are a lot of these underperformance warnings, that will likely be followed by staff reductions unless there is an unexpected revitalization of the economy,” Lonski said, adding that if employees are notified of underperformancethey should prepare for a possible layoff.

Gross domestic product – the broadest measure of the economy – contracted at an annual rate of 0.9% from April to June. The drop, reported by the Commerce Department, came just after a 1.6% annual decline in GDP from January to March. This is a far cry from the 5.7% growth the economy achieved last year.

“It is undeniable that the wage bill will increase much more slowly, if at all, because the reality of economic growth of less than 1.5% on average until 2023 is essential,” added Lonski.

The first thing companies will do is close all open or unfilled positions, which will reduce the number of open jobs in the market, according to Bauke. The next thing companies will do is ask executives to identify underperformers to prepare for possible layoff.

Teleprinter Security Last To change To change %
META META PLATFORMS INC. 159.93 +0.83 +0.52%
GOOGL ALPHABET INC. 114.86 -1.46 -1.26%

“If all the underperformers are fired and they still have to cut, generally they look at departments where they can live without anyone,” Bauke said, adding that it will depend on the department.

Not all industries will be affected equally as some roles are difficult to fill. People with special skills, like accountants or engineers, who are decent artists have nothing to worry about, according to Bauke.

“If they get firedthey will be recovered in the blink of an eye because the demand exceeds the supply and will remain so for a long time,” she added.

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However, these warnings will also be a sign for employees to reevaluate whether they even like the place where they work – especially if they aren’t giving it their all, Bauke added.

Robyn Duda, event strategist and founder of Robynduda.com, agrees. Duda said these warnings are also used as a trick to “weed out those who don’t really want to be there or can’t handle that pressure and that’s an easier way than firing people.”

The Associated Press contributed to this report.

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