The Pulse: Meta’s self-inflicted resignation-wave
The Pulse: Meta’s self-inflicted resignation-waveIn what was predictable: Meta’s layoffs and forced reassignments pushed engineers not impacted by either to look for a new job. Meta is now offering large equity retainers, and it doesn’t seem working
Hi, this is Gergely with a bonus, free issue of the Pragmatic Engineer Newsletter. In every issue, I cover Big Tech and startups through the lens of senior engineers and engineering leaders. Today, we cover one out of four topics from last week’s The Pulse issue. Full subscribers received the article below seven days ago. If you’ve been forwarded this email, you can subscribe here. Two months ago, I covered how Meta seemingly deliberately started destroying its once-standout engineering organization. The company did 10% layoffs at a time when revenue and profits hit an all-time high, and reassigned about 20-30% of software engineers to data labeling with basically no notice. The result was that a good chunk of software engineers at Meta – even those not reassigned – were starting to interview elsewhere:
I said – and still maintain – that the layoffs were an unforced, self-inflicted error on Meta’s part. Coupled with forced reassignment, they struck disaster. And I’ve now gathered new details that confirm that Meta is bleeding top engineering and product management talent: Some layoffs reversed, in the 11th hourIn the UK, mass layoffs require a notification to those potentially affected, before the cuts can happen. A few weeks after this notification, a good chunk of folks were “un-notified,” I confirmed. But those on notice had already started to look for jobs, obviously. Retainer equity grants offered to IC6+ engineers resigningMeta started to offer large retainer equity grants to those resigning and leaving for Google, Anthropic, and OpenAI: a practice not done before. Talking with long-time Meta engineers, Meta simply didn’t make counteroffers or negotiate when an engineer handed in their resignation. But this practice has been abandoned. Here’s a story of a senior, long-tenured engineer I confirmed to have happened:
Retainer equity seems to be offered for most IC6 engineers who resigned in the last few weeks. I talked with seven such people, who were all IC6 (staff-level engineer) and IC7 (principal-level engineers), who shared more details. They are not aware of IC4 (mid-level engineer) or IC5 (senior-level engineers) getting such offers. Retainer equity offered is $400K to $1M+, and vests over 3 years, for the folks who got these offers. The $1M+ offers were all for engineers with Anthropic or OpenAI offers, and I confirmed a $400K and a $600K grant for engineers with an offer for other, smaller AI startups. A current Meta engineer who is interviewing asked me if these folks needed to present their offer letter to get a counteroffer. I asked two of these folks with counteroffers, and neither had to do so, but they both indicated they were handing in their resignation. Upon receiving this notification, their director, together with HR, offered a discretionary retainer equity, should they stay. Anthropic and OpenAI on a hiring spree from MetaAnthropic and OpenAI seem to be on a hiring spree, signing Meta engineers that Meta wants to retain now that it is too late! I have confirmed that three engineers who received an offer from Anthropic were also offered large, $1M+ equity grants (vesting over 4 years) as counter-offers to stay. Two out of the three rejected it and joined Anthropic, and the third one initially accepted the offer and then still left for Anthropic a month later, forfeiting this grant. OpenAI is having similar success, and the two AI labs seem to be the main destination for now ex-Meta engineers to bounce to. It makes sense: these companies can match Meta’s total compensation, and although neither OpenAI nor Anthropic is publicly traded, both companies organize secondary equity sales, and their respective IPOs are likely to happen in 3-12 months’ time. AI startups also successful in hiring infra experts from MetaI had an in-depth discussion with another long-tenured AI infra engineer at Meta, who was considering whether to stay, or to go. This person wrote up their situation, and shared it with me, writing:
After a new reorg, this engineer got a supportive manager, who made it clear they would help them thrive inside of Meta. So the engineer rejected both the AI startup’s offer and that of Google, deciding to stay… but only for a month! The AI startup’s founder spent more time with this engineer, increased the equity in the package significantly, and convinced this engineer that at the startup they matter as a person, while at Meta they would be doing soulless work, worrying about the next layoff, probably early 2027. So this engineer also handed in their resignation. And it all started with the layoffs: the engineer assumed there was a 50% chance of being let go and wanted more career stability! Those deciding to not resign: stay for the money?There are engineers staying – at least until the end of the year, to wait for the stock refershers — which we’ll talk about in just a moment. Another engineer I talked to decided to quit Meta with morale so low, and start his own thing. Management convinced him to stay until the end of the year, hinting at large equity refreshers being handed out around January, which could be in the $1M+ range for this specific engineer. The 2022 stock price causing a TC decrease for many?One reason there’s speculation about large equity refreshers being handed out at the end of the year is that Meta’s stock price was very low in 2022 and 2023, when equity refreshers and new hire grants were handed out. In both March 2022 and March 2023, the stock price was around $200 - which is about a third of this year’s stock price (which has been fluctuating between $520- 680, currently sitting at $540.) By March 2024, the stock price rose to $500, and then to $580 in March 2025. Because of this, those who joined Meta in 2022 have seen their equity grants nearly triple, and the 2023 equity is worth nearly 3x as well. But for these lucky folks, total compensation is set to drop by the end of this year, and their equity refresher would need to be higher than in past years to avoid a compensation drop. Inside of Meta, engineers who I talked to are split between expecting further attrition (those leaving whose total compensation drops steeply) and those who think that there will be more attrition unless there are higher-than-usual equity refreshers. A “mercenary” culture at Meta?I wonder if Meta made a massive mistake by treating engineers as “commodities” and turning their culture into a “mercenary” one. Between March and June, Meta treated engineers as replaceable commodities that could be thrown out or moved between teams, while stripping them of any autonomy. The reassignments to AI labeling were not explained, nor were managers or individuals asked about preferences: from above, someone said that Alice and Bob, starting on Monday, are no longer with the team, but are training up Meta AI. Never mind that these were the two most experienced engineers on the team, or that Bob was the team’s infra expert, and Alice the “fixer” engineer on the team. And all this damage was done, for what? It was to allow Meta to restart its AI coding model development efforts, and release Meta Muse Spark: an AI model that is currently the 7th most capable AI model as per Artificial Intelligence Analysis, tied with Grok 4.5. Credit where it’s due: with this model, Meta is now well ahead of Google’s Gemini in capability. With the damage done, there is little motivation for anyone to stay at Meta – unless they are on a visa, or if it’s about the money. You can have an OK engineering culture with a team who is mostly interested in making more money than what they would elsewhere: but this is more of a mercenary culture, and companies run by mercenaries are more easily out-executed by teams where people believe in the mission of the company. If you work at a company that would love to hire from Meta: now is (still) your opening! So go for it. And if you’re at Meta: you are so in-demand, outside of the company, at places where engineering is still treated as a profit center. As Ryan Nystrom, currently building AI at Notion, put it:
Read the full issue of last week’s The Pulse, or check out this week’s The Pulse. This week’s issue covers:
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