Start with the facts. Employee morale at Facebook continues to fall after a series of failures at the social media giant and a clear lack of leadership by senior management. The string of missteps and scandals since 2016 have damaged the firm`s image. Among employees, 52 percent said they were optimistic about the future of the firm, but this is down substantially from 84 percent just a year ago. While most of the media have not reported these problems, it is becoming clear that after each episode at Facebook, there is a silence that seems to trigger rumors and new questions.
CEO Mark Zuckerberg came under pressure when he failed to address the public regarding an internal scandal last year. Every major firm has a communications department that insists that senior managers put out fires and problem solve to ensure investors do not lose faith and engage in aggressive stock selling, so Facebook does have a problem now.
Facebook`s stock has fallen over 30 percent since July as investors have shown a clear vote of “no confidence” to the Facebook board members. The CEO has seen his personal net wealth drop by over 20 billion dollars and one can only imagine that every board member, paid mainly in stock, has seen his and her wealth melt away. Some reports say that the senior members of Facebook have collectively lost over 30 billion collars of personal wealth in stock holdings over the past 3 months.
And while 87 percent said they were proud to work at the company just a year ago, that number has fallen to 70 percent in a recent survey. More importantly, when asked how long they would stay at the company, the average was 3.9 years in the recent survey, down from 4.3 years expected stay when asked a year ago. These numbers are down but it only confirms that the morale issue is important to these young employees and that after a series of scandals, the once golden image of Facebook has been tarnished. Many employees are leaving from the senior management ranks and it is important to note that these stars, after moving to another firm, will gladly headhunt the talent from Facebook. In business, when seniors move, the junior employees move, sometime in waves, with a year to 18 months. The damage inflicted on Facebook in 2019 could be severe.
In the past year, there has been an executive exodus, multiple user data scandals, and a challenge to curtail harmful content and misinformation as well as flat or declining user growth in some areas. Things are not working as well as Mr Zuckerberg would like, so he is addressing his employees now to see what needs to be fixed. He must recognize the danger as the small and gossip prone San Francisco area workforce is unforgiving to firms who do not show excessive love and attention to their employees.
We predict not only an exodus of seniors managers, but of mid-level employees as well.
Finally, and we have talked about this issue on our platform several times. The share price has been falling since its highs in July 2018. The stock is down 35 percent and as a result, many institutional investors have backed away from the stock. We think this company is not likely to recover as the new generation of youth now reject speech control and group think.