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| One of 11,000 laid off employees |
Abstract
Meta is a company that was originally founded by Mark Zuckerberg in February 2004. Initially known as Facebook, it was a social media site where people could gather online in one place to connect with friends and family, meet new people, join neighborhood groups, and share whatever they felt like sharing. The social media world was still somewhat new in 2004 but over the next decade it grew immensely with Facebook leading the way and buying out any competitor that threatened their position. In 2012, Facebook filed an IPO (Initial Public Offering) and joined the stock market with their initial value being assessed at 104 billion dollars. Over the years Facebook bought Instagram, and Whatsapp among other buyouts further solidifying their place as one of the world's most valuable companies. In March 2020 when the Covid global pandemic hit, Facebook had 48,268 employees. With a pandemic forcing millions of people to be online more, Mark Zuckerberg saw that as an opportunity for growth and he went all in. In October, 2021 Facebook was receiving 97.5% of its revenue from advertising and in that same month Zuckerberg decided to rebrand. Meta was the new name and now the parent company of Facebook, Instagram, Whatsapp, etc. By September 2022, Meta had now employed 87,314 and surely a genius such as Zuckerberg prioritized his employees and put the health/happiness of his staff, and the privacy of his online user base ahead of any personal gain or success of his company. Or did he?
Ethics Case Controversy
Facebook was known as one of the Big 5 of American IT companies along with Alphabet, Amazon, Apple, and Microsoft. Zuckerberg was cruising along from the time he created the company in 2004 until the start of the pandemic. There were some controversies regarding Facebook and the 2016 presidential election that will be addressed later, but for the most part Facebook was thriving and Zuckerberg was loving every minute of it. When the pandemic hit and millions of people spent more time at home and online using Facebook, Netflix, TikTok, etc there was a huge influx of advertising money because the usage on these platforms skyrocketed. Mark Zuckerberg in his layoff letter to employees said "Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments.” (LayoffLetter) He later goes on to admit that he was wrong and takes ownership, but one has to wonder if this potential huge layoff wasn’t a fall back he was planning on. The pandemic was terrible and millions died but I don’t think anyone thought that the pandemic was going to last forever. Even at the height of the pandemic there were tons of people still denying its seriousness and wanting it to end. How then, did Mark Zuckerberg and a team he likely pays very well get this prediction so wrong. Did they really assume that online usage would remain as high during the pandemic as when it was over? Or did the company know they had to hire and sell quickly to take advantage of the increase during the pandemic and never worried or cared that at some point in the future they’d have to lay off a large percentage of their staff.
The pandemic alone can’t be fully to blame for Meta having to lay off 13,000 or 13% of its workforce. The rebranding to Meta at the same time Facebook was seeing record profits also should be called into question. In October, 2021 Zuckerberg came out saying he was rebranding and created Meta which stood for the metaverse. He saw this as the future of social media but why now, when the company was so successful did he make this change. Two months prior, an ex-product manager at Facebook Frances Haugen became a whistleblower against Facebook. She produced tons of evidence and testified before the SEC (securities exchange commission) and the US Congress, and on 60 Minutes with information showing how unethical and shady Facebook and Zuckerberg had been. “The documents paint a picture of a company that is often aware of the harms to which it contributes—but is either unwilling or unable to act against them.” (Time) She showed evidence of how Facebook knew they were spreading misinformation throughout the 2016 election, misinformation throughout a deadly pandemic, and the mental health effects of Instagram usage for teens, among others. She also said how Facebook was lying to shareholders about the value and direction of the company. She made the claim and had evidence to support it that Facebook put profit over safety and that they willingly ignored the dangers of their platform in order to make money. Facebook came out and denied her reports saying that they spend five billion every year keeping their platforms safe. Eight other whistleblowers came out after Haugen did against Facebook. Facebook stock fell after these reports but within two months Zuckerberg “rebranded” but was that just a way to change names and hide behind the guilt that Haugen had already laid out.
Another huge controversy that further declined Meta’s profits in 2022 was the reports that Meta had provided personal data information to a group of hackers posing as Law Enforcement. In March 2022 it was reported that hackers compromised emails of police and sent “emergency data requests” to Meta for users' home addresses, phone numbers, IP addresses and other subscriber information. This is troublesome if you’re a user of the platform because you trust a company like Meta to protect your information. “Facebook has been scrutinized for its handling of user data for years following reports that Cambridge Analytics obtained data on tens of millions of the platform’s users.” (Bloomberg) This is another example like Haugen said above where Meta puts profit over privacy.
Stakeholders
The main stakeholders within Meta are its individual users, its shareholders, employees both current and terminated, and its advertisers. According to Bloomberg as of October 2022, there are currently 3.71 billion users across all of Meta’s platforms. That’s a lot of personal data information that people trust Meta to protect. Shareholders are people that own shares of a company and buy into the company hoping to make money. Vanguard, Fidelity etc are large shareholders of Meta and likely if you have a retirement account you are also a shareholder of Meta since it's been a huge successful company for so long. At the end of September before laying off 11,000 Meta employed 87,314. This number would include Mark Zuckerberg himself but not ex-employees like whistleblower Frances Haugen and countless others. It is estimated that Meta has over three million advertisers that pay for ads across Meta’s platforms. It’s easy to see that a company like Meta has lots of stakeholders that trust Zuckerberg to lead both a successful and ethical company.
Individualism
According to economist Milton Friedman “the only goal of a business is to profit, so the only obligation that the business person has is to maximize profit for the owner or the stockholders within the law or the rules of the game.” (Salazar_Slides) He fully believed in a free market and capitalistic society where companies can make as much money as they want even when they don’t value their employees, or value their customers' privacy. Individualism prioritizes the profit of the owner and stockholders ahead of what could be morally right like creating a safe work environment. During the Covid pandemic, Mark Zuckerberg took a chance that social media use would remain high and advertising dollars would keep coming in. In a span of 2.5 years from 3/20 until 9/22 he increased his staff working at Meta by 80%. Meta hired more people to maximize his profit and the profit of his company. According to Yahoo Finance, each share of Facebook stock on 3/4/2020 was worth $163.90 and by 9/6/2021 it was worth $375.88. That is an increase per share of almost 130%. Safe to say that Zuckerberg and the shareholders profited a lot from his decision to double down on the pandemic. Zuckerberg took a risk knowing full well that the jobs he promised people might not last, but he needed their commitment to Meta in order for the company to make this huge profit. He swung big and missed though since the advertising dollars stopped rolling in after the pandemic both due to reduced online usage, competition from other social media sites, and negative publicity from ex employees like Haugen. By 10/31/2022 each share was now only worth $98.22 and within weeks is when Meta laid off 11,000 workers. What Zuckerberg did doesn’t violate any laws and he prioritized his own profit and the profit of his shareholders ahead of the jobs his employees depended on. An Individualist like Friedman would be ok with Zuckerberg laying off any amount he needed at Meta as long as it kept profits rolling in.
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| Share price of Meta 3/2020 through 12/2022 |
Utilitarianism
Utilitarianism is a theory that allows for actions that maximize the most happiness in yourself and others. “Happiness or pleasure are the only things of intrinsic value” (Salazar_Slides) Utilitarianism believes that you should always tell the truth even if it doesn’t create happiness and that lying is morally impermissible. Trying to figure out if each Meta stakeholder's happiness was maximized in Zuckerberg’s decision to lay off 11,000 is a hard one to determine. It’s been shown that Meta has over 3 billion stakeholders but not each person was affected in the same way with the layoffs. Firstly you’d assume that the 11,000 that were laid off and their families were affected the worst in that they lost their job and source of income and who knows how long it could take them to get employment equal to what they had. In their declining profit and news of layoffs millions of shareholders saw the money they had invested in Meta drop as the share price dropped so they would be unhappy with the layoff decision. Utilitarianism would likely be ok with sacrificing the happiness of the 11,000 that lost their jobs and the profit loss for the shareholders that invested because laying off those workers could be needed for the future success of Meta. Utilitarianism would see that there are 3.71 billion users across Meta platforms that use social media which makes them happy. Online users' short term happiness isn’t as profound as losing your job. Since there are significantly more people receiving happiness from Meta’s platforms than those that lost their jobs, a Utilitarianist would see the layoff decision as a good one since it allowed for the most people to be happy.
Kantianism
Meta’s layoff passed the Utilitarianism theory but it definitely does not pass the Kantianism theory. According to Kants, there is only one right motivation to do something and that’s because it is simply the right thing to do. Obviously laying off 11,000 workers 6 weeks before Christmas is not the right thing to do, especially when you’re still a multi-billion dollar company. Kant defined morality using three Categorical Imperatives which are laws of rationality or logic. One of these imperatives is Humanity which means that we should always be fair and respectful and never treat people as a means to get something. Zuckerberg hired thousands of people likely knowing full well that social media usage wouldn’t remain as high as it was during the pandemic. He treated these people as a means to bring him more money knowing full well he would lay them off the minute they didn’t bring him value. Another problem that Kantians would find with Meta and Zuckerberg is that everything he did was motivated by self-interest. Hiring people, laying off people, selling personal data was all motivated by how it would impact his profit. Universal Law says that “you can act for that reason while at the same time willing that it be a universal law that everyone adopts that reason for acting.” (Salazar) Meta didn’t pass the universal law since their reason for acting was for profit and society would say the same for any other company that valued profits over people.
Virtue Theory
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| CEO-Mark Zuckerberg |
In looking at virtue theory Mark Zuckerberg would be the person to focus on as he is the CEO of Meta and all decisions are made and approved by him including the one to layoff 11,000 employees. There are four major virtues consisting of courage, temperance, justice, and honesty and does Zuckerberg appease these virtues in his daily role as CEO. Courage virtue consists of taking risks and having the courage to take a stand for the right ideas. Zuckerberg definitely took big risks as CEO of Meta in thinking that online usage would remain high, he thought it would continue so he hired tons of people, he spent money on new programs and invested further in the metaverse. Zuckerberg wouldn’t be as successful as he is without taking risks and he did stand up to the ideas he had that he thought would succeed so therefore he passes the Courage virtue. The temperance virtue is one that forces self control and It holds us accountable for our work and actions. Temperance slows things down and allows you to look at the bigger picture beyond what might be happening today. Zuckerberg wouldn’t pass the temperance virtue because he showed no real self control in jumping to hire thousands during the pandemic. If he had thought long term he would have seen that it was more likely online usage would drop as the pandemic went away. He could have predicted a future where those hired employees weren’t needed if he had shown some self-control instead of only seeing dollar signs early in the pandemic. Justice theory speaks for itself, were you a leader that was just and fair in your treatment of people. Did you work hard and were you honest and in this virtue Zuckerberg failed. As a CEO and leader if you make the wrong decisions and hire thousands of people only to lay them off a couple years later then that is not just. As the CEO Zuckerberg needs to take the blame for getting his prediction so wrong. Finally the fourth virtue is Honesty and was Zuckerberg honest in his treatment and hiring of employees and his treatment of customers and other companies he dealt with. Zuckerberg failed this virtue also since he hired people only for personal profit as I believe he knew this usage increase was going to be short term. He also wasn’t honest in what he did with customers' personal information in giving it to hackers.
Justified Ethics Evaluation
In my opinion Mark Zuckerberg has failed in many ways ethically in protecting his employees right to work, his customers right to privacy, his platforms right to view honest and trustworthy material. Meta is a billion dollar company that should be held to a higher standard when it comes to being honest and fair and treating people with respect. I believe that Mark Zuckerberg knew that the pandemic wasn’t going to last forever and he hired thousands of people with the promise of good stable jobs. He used those people for 2.5 years for his own personal profit before laying off 11,000 of them. The fall of 2021 whistleblowers came out against Facebook and Zuckerberg with evidence as to the wrongdoings of the company. Just two months after these reports came out, Zuckerberg thought that by “rebranding” it would give him a fresh start. He wanted to ignore the problems the company had instead of facing them head on and dealing with them. After rebranding in the fall of 2021 to Meta the company continued to lose money. They saw a huge reduction in advertising money throughout 2022 due to the pandemic slowly ending. Meta also lost public faith when in March of 2022 it was found that they had given users personal data information to hackers. Meta lost money throughout 2022 until in November when Zuckerberg announced he was laying off 11,000 workers. While he did take blame for being wrong in predicting online usage would continue I think he was wrong in blaming competitors like Tik Tok or the fact that Apple was charging them more. Meta has a lot of internal problems and until Zuckerberg can take ownership of the many faults they have instead of blaming it on other things I believe we can expect more layoffs in their future. One of the biggest ethical problems I have with his decision to lay off is that “in 2020, Facebook, Inc. spent $19.7 million on lobbying, hiring 79 lobbyists. Facebook was the largest spender of lobbying money among the 5 Big Tech companies in 2020.” (Bloomberg) If they are spending that much on wasteful lobbying they could have figured out a way to not lay off 11,000 hard workers 6 weeks before Christmas.
In conclusion Zuckerberg is one of the richest and powerful business minds of mine and likely most generations. He surrounds himself with some of the smartest people to maintain a company that almost 4 billion users rely on. I can’t talk to the complexities of how hard it must be for Mark Zuckerberg. I can however talk to the basic decencies of human interactions and treating people. Never should a person's well-being be second to your personal profit. Never should false information or science denying platforms be openly shared so easily that can hurt real people. Never should personal information be sold because it can make someone a profit. Zuckerberg might think the metaverse is the future of social media, but before we get there he has a responsibility to be moral and just and honest and truthful to all of Meta’s stakeholders, today, tomorrow, and in the metaverse.
2/2004 → MARK ZUCKERBERG FOUNDED FACEBOOK
1/2012 → FACEBOOK FILED IPO, COMPANY VALUED AT 104 BILLION
2/2012 → FACEBOOK BOUGHT WHATSAPP FOR 19 BILLION
3/2012 → FACEBOOK BOUGHT OCULUS VR FOR 2.3 BILLION
4/2012 → FACEBOOK BOUGHT INSTAGRAM FOR 1 BILLION
3/2020 → COVID PANDEMIC BEGINS - CURRENT EMPLOYEES 48,268
10/2021 → FACEBOOK RECEIVES 97.5% REVENUE FROM ADVERTISING
10/2021 → FACEBOOK NAME CHANGE TO META PLATFORMS, INC.
2/2022 → META REPORTS BIG DECLINE IN PROFITS FROM Q4
2/2022 → META LOSES 230 BILLION IN MARKET VALUE
3/2022 → NEWS REPORTS META GAVE PERSONAL DATA TO HACKERS
6/2022 → COO OF 14 YEARS ANNOUNCED SHE’S LEAVING META
7/2022 → FIRST EVER REPORTED YEARLY REVENUE DECLINE BY 1%
9/2022 → META EMPLOYS 87,314, UP 80% SINCE PANDEMIC BEGAN
11/2022 → META LAYS OFF 11,000 OR 13% OF ITS WORKFORCEWorks Cited
Frenkel, Sheera, et al. “Meta Lays off More than 11,000 Employees.” The New York Times, The New York Times, 9 Nov. 2022, https://www.nytimes.com/2022/11/09/technology/meta-layoffs-facebook.html.
“Mark Zuckerberg's Message to Meta Employees.” Meta, 9 Nov. 2022, https://about.fb.com/news/2022/11/mark-zuckerberg-layoff-message-to-employees/.
Perrigo, Billy. “Why Whistleblower Frances Haugen Decided to Take on Facebook.” Time, Time, 22 Nov. 2021, https://time.com/6121931/frances-haugen-facebook-whistleblower-profile/.
Person, and Katie Paul. “Exclusive: Meta Slashes Hiring Plans, Girds for 'Fierce' Headwinds.” Reuters, Thomson Reuters, 1 July 2022, https://www.reuters.com/technology/exclusive-meta-girds-fierce-headwinds-slower-growth-second-half-memo-2022-06-30/.
Turton, William. “Apple, Meta Gave User Data to Hackers with Forged Legal Requests (AAPL, FB).” Bloomberg.com, Bloomberg, 30 Mar. 2022, https://www.bloomberg.com/news/articles/2022-03-30/apple-meta-gave-user-data-to-hackers-who-forged-legal-requests.
Wagner, Kurt. “Meta Freezes Hiring, Cuts Headcount, Slashes Budgets across Teams.” Bloomberg.com, Bloomberg, 29 Sept. 2022, https://www.bloomberg.com/news/articles/2022-09-29/meta-announces-hiring-freeze-warns-employees-of-restructuring?srnd=premium#xj4y7vzkg.
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