I will confess that I snickered more than a little bit when I watched the video below by Reuters titled, “How Meta’s plan to restructure teams with AI imploded.” Apparently, in their annual planning meeting at the beginning of the year at Zuckerberg’s compound in Hawaii, the leadership team discussed ways to reimagine the way work would happen at the organization. They named this Project OT for organization transformation. 

This isn’t at all surprising. Many executive teams have probably had similar conversations. 

From the video:

And with that, Meta was looking at how to go AI native, meaning how to reimagine team structures and transfer people to new AI related initiatives. At the max end, Meta explored cutting as much as 60% of the headcount from those existing teams. 

At the time, executives were really optimistic. Executives are imagining that with AI technology, a really talented person can do the work that was once performed by a bigger team.

Please take a second to consider what 60% of the headcount might mean. It’s a little chilling, from my perspective. 

Apparently, the planning scenarios weren’t shared with employees. While not unexpected, it turned out not to be a great decision, and because of the lack of transparency, the initiative failed. 

From the video:

The restructuring was to be carried out in two waves, starting with a first one in May and then followed by a second shakeup in November. What Meta told us is that they got as far as determining what they wanted to do for the first wave, which took place on May 20th. So on May 20th, they laid off about 10% of the staff and they transferred roughly the same amount to new initiatives that they had spun up.

Mark Zuckerberg called off planning for the second wave of restructuring the night before the May 20th layoffs. We don’t know why he did this exactly.

But here is the juicy part, and also the not shocking part if you have ever held a job at a big corporation. Employees can sense changes coming and smell fear in the room when executive teams do not share their vision and plans for the future. However bad the news, the rumor mill will likely make it much worse. I have experienced this first hand at multiple organizations. 

From the video:

Employees by then had learned of what the company was planning. They saw signs that the company’s AI transformation was at least partly aimed at replacing them. And they revolted effectively. They were posting angry comments on the company’s internal workplace systems. They were sharing memes of elephants, calling layoffs the elephant in the room, and so the company had a big morale problem on its hands and executives were well aware of that. 

At the same time, internal data was showing indications that the AI agent technology wasn’t developing as they had hoped. As early as March, infrastructure teams were warning about reliability issues, saying that AI agents were taking disruptive actions that were unpredictable, and also the AI coding surge itself was overwhelming.

To add some additional context, let’s remember that Meta has almost unlimited funding and access to the best technical resources. If they are having trouble replacing headcount with AI technology, your company will likely as well. 

So, before you let good people go, make sure the technology really can do what you need it to do. Slow your roll a bit and do more planning and testing on the front end to avoid big problems and a potentially embarrassing mess on the back end. 

Photo by Nishaan ahmed on Unsplash