Public Venture

Startups Could Benefit If Facebook’s Employee Retention Slips

The markets are closed today and venture is entering the holiday period. So let’s talk about Facebook.

Facebook’s in the soup at the moment for a number of reasons that a host of excellent journalists are covering with rigor. Casey Newton’s work, Sarah Frier’s writing, and Charlie Warzel and Ryan Mac are in the mix as well. If you are behind, it’s on you.

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The latest facet of the reporting cycle on Facebook that has caught my eye is Facebook’s employee retention risk. This CNBC story that made the rounds this week claims that Facebook employees are looking for exits, but it’s hardly quantitive. This Buzzfeed News story from earlier today has notes on internal discontent, as does this Bloomberg piece from a few days back.

Their composite picture is Facebook workers—long reported in and around Silicon Valley to be a bit hard to unstick from their current office chairs—are losing enthusiasm.

And this morning, Axios’ Ina Fried reported some Glassdoor data—the Yelp for workplaces that every Valley company keeps tabs on—that shows Facebook slipping in the workplace rankings. So the company’s punishing run of corporate mistakes and risible PR choices are taking a measurable toll, although a smaller impact than you might have thought. Here’s Ina:

“After a year of scandals, Facebook lost its place as the best company to work at, according to Glassdoor. Facebook fell from first to seventh in the survey.”

The trend is probably more interesting than the result. If Facebook’s ranking continues to dip over time it could suffer from a two-sided issue: hiring and retention. In a vying industry rife with wealthy competition looking to poach your best talent and compete for new hires, losing luster can be a bleeding process. And Facebook just dropped from first to one notch lower than Linkedin in the Glassdoor report.

My question is if antsy Facebook employees looking for something new to do will leave the social giant for another behemoth, like Google, or jump into startups. Of course, it will be a mixture of both, but which way the weighting lands will matter. Facebook’s loss could be the gain of a host of myriad smaller companies if they can attract the sort of talent that Facebook has long been loath to share.

Even more pertinent to our readers: how many Facebook employees may now leave to start their own companies? How many will go to work on new social products? Sure, Snap isn’t going to harm Facebook anytime soon, but there will be a next It social network, and there’s no guarantee that Facebook will be able to buy it.

And, of course, some Facebook employees just might stop working. The firm has generated so much money that not all its current denizens need to remain in the working classes. So many even go full-leisure and become investors.

In a few more months we’ll have another round or two of anecdotal reporting concerning Facebook morale, especially if the company continues to suffer from self-inflicted injury (here’s some whatnot from this morning, as an example). But what I’m keeping an eye out for is smaller companies announcing that they have a shiny new ex-Facebook exec or notes from founders proud to have picked up Facebook engineering talent.

That may not happen; Facebook may be able to use its titanic wealth, history of employee retention, and more to keep staff in place. But in a talent market as broken as Silicon Valley’s in 2018, it’s tough to see that bearing out completely.

Microsoft worth more than Apple? Facebook with an employee retention problem? Bitcoin pulling an anti-2017? It’s an odd year.

Illustration: Li-Anne Dias