Shares in parent company Meta, Facebook and Instagram, have fallen more than 40% in the past six months, and some employees, saddled with underwater stock options, are eyeing an exit.
“Joined the Meta next to [all time stock high]now I feel like shit,” a Meta employee said in a popular thread on Blind, the corporate message board with verified members, this week. “What should I do?”
“Get out of this shitty place,” another Metamat replied.
“Same boat,” said a third, adding that they were “already interviewing” with other companies.
“Yeah, you gotta think about the Meta, the Metamats and me. Ask yourself if this way of thinking is good for the company,” joked a fourth. “Just kidding… this sucks super.”
The sharp drop in Meta’s stock price has caused concern among some employees. Getty Images
Meta is facing a labor crush as its share price fell from an all-time high of over $380 in September to $216.49 on Friday. The fall began last fall when a series of killer leaks put huge political pressure on the company and soared when Meta began to feel the multi-billion dollar sting of Apple and Google’s privacy changes hitting its advertising business.
“People are definitely paying attention and worrying about the stock price,” Michael Solomon, who manages software engineers through his talent firm 10x Management, told The Post. “I think a lot of people have questions about whether the Meta is going to get out of this – could this be the beginning of the end for them.”
Meta shares are down over 40% after hitting an all-time high in September 2021. REUTERS
“It’s in your best interest to leave”
When software engineers join companies like Meta, Google, or Amazon, their compensation is usually about 50/50 cash and stock options, with entry-level employees getting more money and more experienced workers getting more stock. technical salary tracker level.fyi.
At Meta, new hires are usually granted a certain number of restricted shares based on the company’s average share price at the time they are hired. This means that employees who joined the company before the stock took off can have huge benefits, but it also makes them vulnerable to downturns.
For example, a Meta employee who received $100,000 worth of limited-use shares during the company’s September stock peak will now be left with about $57,000.
It also means that opportunists from other companies like Microsoft, which is down 10.3% this year, could theoretically “buy the dip” by taking jobs at a shabby company like Meta, getting more stock options for more low price. price.
Many tech workers have seen the value of their stock options drop.Getty Images/iStockphoto
In response to a dissatisfied “Metamate” post on Blind, one Microsoft employee wrote: “Only people who are transferring companies right now would be nice to go. I do exactly that and head to the Meta.”
Laura Martin, a tech and media analyst at Needham & Company, said that while many tech workers may feel loyal to their companies, it makes financial sense for many to change jobs when the value of their options drops.
“If you’re not going to make money from your stock options within three years, it’s in your best interest to leave,” Martin told The Post. “I agree with the decision to leave your current firm and go into the company and buy shares at their current price.”
“I think a lot of people have questions about whether Meta is going to get out of this — could it be the beginning of the end for them,” said tech talent agent Michael Solomon. Getty Images
“Much higher monetary compensation”
While Meta is the most extreme example, the entire tech sector has tumbled this year after hitting all-time highs in 2021. The tech-focused Nasdaq composite index fell 12.3% in 2022, while Apple shares fell 9.9% and Amazon shares fell 5.3%. % and Google shares 5.7%.
With stock options becoming less valuable across the board, big tech companies are now realizing that money is everything, according to Richard Cramer, technical analyst and founder of Arete Research.
“The big tech firms are just paying much higher cash compensation as the top 5 have combined net income of $345 billion,” Cramer told The Post. “The fight for the best talent never stops.”
According to Brian Kropp, head of human resources research at consulting firm Gartner, compensation often comes in the form of “cash incentives” that are paid on the condition that employees stay with the company for a certain number of years.
Google shares also fell in 2022. Getty Images
“As your stock price drops, capped stocks become less and less effective as a retention strategy,” Kropp told The Post.
Some engineers looking for cash rather than stock options have been able to negotiate massive payouts from Meta in recent months, according to Solomon, a talent agent.
“They get the best deals because the Meta knows they have to compensate,” Solomon said.
Meta did not respond to questions about the steps it is taking to retain and attract talent.
Some small tech companies have been hit harder than Meta.Getty Images
“The stock is way bigger than Meta’s”
While the likes of Meta and Amazon have been hurt in 2022, some of the smaller tech companies that have flourished during the pandemic have felt more pain as the Federal Reserve raises interest rates and investors ditch tech stocks.
Shares of Netflix, which rose sharply during the lockdown, are down 33.9% this year. Shares of video conferencing company Zoom fell from an all-time high of $310 in September to $116.28. And Robinhood, the stock trading app that capitalized on the “meme stock” boom of 2020 and 2021, traded as low as $70 shortly after it went public last summer but has since fallen to less than $13.50. dollars.
The list goes on: Employees at PayPal, e-commerce company Shopify, beleaguered fitness company Peloton, and electric car maker Rivian have all complained about their companies’ stocks plummeting in recent months.
“I joined Rivian in January and I lost over 50%,” one Rivian employee wrote, accompanied by a “facepalm” emoji.
A shake-up in lower-tier tech companies could help Meta and other big tech companies swoop in and hire talent, Cramer said, at least partly offsetting any layoffs related to falling stocks.
“They’re hiring from hundreds of other enterprise software companies, etc., whose stock has fallen a lot more than Meta’s,” he said.
Cramer added that the biggest tech companies don’t actively poach each other’s employees because that would be a “recipe for wage inflation.”
However, this does not prevent employees of one large technology firm from getting a job in another.