Zuckerberg now mirrors Musk after years of criticizing each other

CEO of Meta Platforms META –0.20%, Mark Zuckerberg, sounds a lot like Tesla TSLA –1.21% CEO and Twitter owner Elon Musk when he talks about the labor market.

‍

As part of Meta's " Year of Efficiency " update, Zuckerberg wrote: “On average, engineers who joined Meta in-person and then transferred to remote or remained in-person performed better than remote engineers, according to our early performance analysis.”

‍

Neither Musk nor Elon Musk seems to be a fan of remote work.

‍

"Anyone who is capable of being in office should be in office," Musk tweeted shortly after he took over Twitter in November. “I would advise them to stay at home if this is not possible logistically or if they need to attend to personal matters. As long as their manager is able to vouch for excellence if they are going to work remotely, it will be fine. This is the same policy that Tesla and SpaceX have.

‍

Zuckerberg added that the “org leaders will announce restructuring plans within the next couple of months focused on flattening our organizations, canceling lower-priority projects, and reducing hiring.”

‍

Musk was the first to flatten, cutting deeply into Twitter shortly after he took over the company. Approximately half of the company's workforce was laid off as a result of his actions. As to Twitter's reduction in force, Musk didn't have a choice when the company is losing over $4 million a day, as he tweeted back in November: "Unfortunately, there is no option when the company is losing over $4 million a day," he wrote.

‍

It is anticipated that Meta will lay off approximately 10,000 people this year, which is about 11% of its workforce of about 86,500 at the end of last year. While it is smaller than Musk's cut, it is larger than the cuts announced by other tech firms.

‍

Alphabet GOOGL -0.86% (GOOGL) is laying off 6% of its staff. Microsoft (MSFT) and Amazon.com (AMZN) announced cuts to their workforces of about 1% and 5%, respectively.

‍

About 11,000 Meta employees were also laid off last year. The number of people who were displaced at the start of that year amounted to about 15% of the workforce.

‍

Meta is justified in cutting a little deeper. Amazon, Google, and Microsoft are the only companies to generate fewer sales per employee in 2022 than they did in 2017.

‍

Since 2017, Musk's other company, Tesla (TSLA), has increased productivity by about 100%. Increasing car sales helped it accomplish that.

‍

There are many factors that make it difficult to compare Tesla to other automakers due to its growth. Approximately $637,000 in sales will be generated by Tesla per employee in 2022, according to the company. This past year, General Motors (GM) and Ford Motor F –4.74% (F) generated sales of about $939,000 and 914,000 per employee, respectively, for their respective companies.

‍

Even Tesla can improve its efficiency. With its new plants, it should deliver more cars.

‍

Lately, labor has become increasingly in the spotlight as the U.S. continues to add jobs while the big tech firms announce layoffs on a regular basis. It is a paradox that investors have to work out in order to succeed. There is either a canary in the coal mine, a sign that things for the U.S. economy are about to get worse, or the layoffs are a sign that the big tech companies overhired during the COVID era.

‍

Maybe Elon Musk was right about big tech firms not needing such a large number of employees as they once thought.

‍

In contrast, the S&P 500 climbed 1.7% and the Nasdaq Composite added 2.1%, respectively, while Meta Platforms stock closed up 7.3%. This is in addition to Zuckerberg's claim that Meta will spend $3 billion less this year, resulting in a $89 billion midpoint for expenses in 2023, down from $92 billion in 2018.

‍

Meta stock was up 61% year to date as of Tuesday's trading. Management's cost controls have been well received by investors.