- LVMH CEO Bernard Arnault calls Mark Zuckerberg’s move to lay off low-performing Meta employees a chance for the workers to be “promoted outwards, so to speak.”
If you were just laid off, you were actually “promoted outwards.” At least that’s how LVMH CEO Bernard Arnault sees it.
Following Meta’s layoffs earlier this month, Arnault, the head of the luxury goods conglomerate that controls brands like Louis Vuitton, Fendi, and Sephora, likened Meta CEO Mark Zuckerberg’s move to let go of low-performing workers to layoffs at Tiffany’s.
Arnault said on a Tuesday earnings call he had spoken with Zuckerberg about the layoffs, and said those workers were being “promoted outwards, so to speak.”
In mid-January, Meta announced in an internal memo it was cutting about 5% of staff based on performance, but planned to hire new people to fill their places. That accounts for roughly 3,600 jobs, since the tech giant employed about 72,000 people as of September 2024.
“I’ve decided to raise the bar on performance management and move out low-performers faster,” Zuckerberg wrote in the internal message, according to Bloomberg. “We typically manage out people who aren’t meeting expectations over the course of a year, but now we’re going to do more extensive performance-based cuts during this cycle.”
Arnault revealed during the Tuesday earnings call LVMH was doing something similar with employees at Tiffany’s, the iconic jewelry brand, which was acquired in 2021 by LVMH. He called Tiffany’s a “sleeping beauty,” only awoken by LVMH’s acquisition, so the company “didn’t have a choice” but to let go of employees.
LVMH didn’t announce how many people were or would be laid off at Tiffany’s and didn’t respond to Coins2Day’s request for comment.
“When you’re used to sleeping for 10 years, and you’re all of a sudden asked to become fierce, and when you’re expected to achieve high objectives, some people can’t,” Arnault said during the earnings call. “Unfortunately, we were not able to keep everyone.”
LVMH is just the latest example of a company using jargon to describe layoffs. An Amazon manager revealed to Business Insider the company sometimes describes layoffs as “unregretted attrition.”
Others have masked layoffs and other aggressive restructuring by calling it “rightsizing.” While layoffs or rightsizing can have some benefits for a company including cost reductions and increased efficiency, the Academy to Innovate HR also lists several downfalls including lower employee morale, negative brand reputation, legal risks, resistance, and disruption.
And according to Harvard Business Review, job cuts rarely help senior leaders achieve goals, and a University of Texas at Arlington study found that layoffs had a negative effect on stock prices.
Another economic historian wrote in Bloomberg an increased level of layoffs “mark a revival of long-discredited corporate strategies.”
“If the trend continues, history suggests these tech leaders will leave their companies severely crippled, at best,” Stephen Mihm wrote in Bloomberg.