Hello! Business Insider’s Alistair Barr thought he was doing the right thing when a colleague discouraged him from joining a little-known startup in 2016, but it turns out he was wrong. That’s really wrong. This startup is OpenAI, and my former colleague, who I thankfully didn’t listen to, is now an AI billionaire.
Today’s big story: In preparation for what Mark Zuckerberg has described as a “tumultuous year,” Meta is making company-wide cuts to quickly weed out underperforming talent.
what’s on deck
Marketplace: The saga of finding Jamie Dimon’s replacement takes another turn.
Technicians: Microsoft employees across multiple departments have been laid off.
Business: President-elect Donald Trump announces plans for external revenue services.
But first, let’s start with the cutting board.
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big story
raise the hurdle
Credits: Anadolu/Getty, Irina Gutyryak/Getty, Tyler Le/BI
Tired: Move fast and break things. Wired: Act fast and eliminate underperformers.
Two years after Mark Zuckerberg’s famous “Year of Efficiency,” the Meta CEO is taking things a step further.
According to a report from Business Insider’s Jyoti Mann and Hugh Langley, the tech giant announced plans to cut 5% of its workforce, focusing on its worst-performing employees. Based on Meta’s latest earnings report, this equates to approximately 3,600 roles.
In a memo to employees, Zuckerberg said the company was having a “tumultuous year” and the decision had been made to “fire poor performers faster.”
So how does Mehta plan to do it? Jyoti and Pranav Dixit obtained an internal memo from a human resources executive that explains how the layoffs will work.
The key is to achieve a positive turnover rate of 5% this year. For those of you who don’t speak much HR jargon, this meta describes a worker who is willing to lose.
To get there, meta-managers need to identify the 12 to 15 percent of employees whose performance ratings are at or below “Most Meets Expectations.” Those who were rated “I met some people” and “I met none” will definitely be fired, but those who were rated “I met them the most” will be fired before the decision is made. will be further evaluated by
They won’t have much time to do it. U.S.-based employees will know about the layoffs by February 10th.
Meta CEO Mark Zuckerberg. Alex Wong (via Getty Images)
Meta employees had many questions about strategy.
Some people supported this idea. “Standards need to be raised and I absolutely support this,” one person wrote on an internal bulletin board seen by Jyoti and Hugh.
But others were less optimistic. Some wonder how efficient this process will be.
The process is “slightly better than ‘monkey dart throwing,'” another employee wrote.
Like it or not, it may be here to stay. An internal FAQ document seen by BI suggests that performance-related job cuts could become an annual tradition at Meta.
The bigger question is whether this approach will catch on at other companies. Some would argue that Mr. Zuckerberg’s 2023 efficiency drive was the start of a broader trend. (Or maybe it happened out of necessity, anyway.)
While periodic performance-based reductions are not the norm in the technology industry as they are in other industries, they are not unheard of either. Amazon, in particular, has been focusing on performance improvement plans in recent years.
News summary
top heading
Three things in the market
Business Insider’s Gracia Lam
1. There are many different types of crypto, but currency is not one of them. Digital currencies like Bitcoin have been gaining traction for years, but the possibility of them replacing money (as some predict) still seems far-fetched. BI’s Adam Rogers writes about how cryptocurrencies have become a new way for people to gamble.
2. JPMorgan and BlackRock will shake up their executive ranks. Daniel Pinto, the bank’s president and chief operating officer, resigned in June and is expected to retire at the end of 2026. Jennifer Piepszak, currently co-CEO of JPMorgan’s commercial and investment banking, will succeed Pinto as chief operating officer. However, this promotion is not about CEO Jamie Dimon grooming a successor. Mr. Piepszak does not want the top job, further raising questions about Mr. Dimon’s succession plan. Meanwhile, the race to succeed Larry Fink at BlackRock, another Wall Street titan, has taken a turn with the resignation of Mark Weedman, who was widely seen as the frontrunner.
3. The economic impact of the Los Angeles wildfires. AccuWeather estimates that the total economic cost could reach $275 billion. Goldman Sachs said it could rank as one of the costliest natural disasters in U.S. history as a percentage of gross domestic product (GDP). However, the bank is not concerned that rising premiums will have a material impact on inflation. In the meantime, here’s a rundown of who can afford the hefty costs.
3 things about technology
Alison Robert Poole/Getty Images; Rebecca Zisser/BI
1. TikTok’s fate is at stake. US users are flocking to Chinese app RedNote, and TikTok Shop sellers are experimenting with other electronic marketplaces. However, it is not impossible to sell the app to an American owner. There are also reports that Chinese authorities are considering an 11th-hour sale to Elon Musk. Musk stock? Certainly not.
2. Apple will be hit despite launching the AI iPhone. The tech giant had an outstanding year in 2024 with the debut of Apple Intelligence and Vision Pro. However, its global market share in smartphone sales declined as the iPhone lost out to competitors and new AI features were not available in Greater China, one of the company’s major markets.
3. Monopoly: Layoffs sweeping Microsoft. Two people with knowledge of the matter told BI that employees in security, experiences and devices, sales and gaming faced layoffs. The job cuts are in addition to recent job cuts targeting internal underperformers that BI previously reported.
3 things in business
Christina Bunfrey. Nathan Congleton/Getty Images; Alyssa Powell/BI
1. Justin Baldoni’s New York Times lawsuit could hinge on emojis. The director of “It Ends with Us” accused the newspaper of taking a spokesperson’s words out of context. He said the paper omitted an emoji (an upside-down smiling face) that made it clear the spokesperson was being sarcastic rather than being serious.
2. Trump has a tax plan, but Congress is in control. On his first day, the president-elect vowed to create an “External Revenue Service” to collect customs duties and revenues from foreign countries. It is unclear how the new agency will work, but its creation will require parliamentary approval. Americans back home could see their taxes change this year as President Trump’s 2017 policy deadline approaches.
3. Come for coffee and stay for refills. Starbucks announced that starting January 27th, all customers, not just Rewards members, will be able to get free refills on many brewed coffee and tea drinks at participating locations. However, the free service ends there, as the company has closed the door on its open-door policy. To allow non-paying guests to use store facilities.
In other news
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