Zuckerberg's Reason for Transforming into a 'Wall Street-Style CEO' Instead of Silicon Valley One

"Profit Enables Innovation"... Shift to Growth-Centered Policy
Facing Crisis with Customized Advertising Challenges and Key Executive Departures
Meta Equipped with 'McKenzie AI' Sees 160% Stock Surge This Year

Mark Zuckerberg, CEO of Meta Platforms, has recently been analyzed as showcasing Wall Street-style CEO leadership focused on efficiency. He has shifted from a management style that emphasized innovation from the startup phase through business expansion to a Wall Street-style CEO who ruthlessly executes mass layoffs in the face of crises such as declining profitability and executive turnover.

Attention is focused on whether the changes in CEO Zuckerberg, who has been busy this year engaging in a fight with Tesla CEO Elon Musk and launching the social networking service (SNS) Threads, will lead to success.

Mark Zuckerberg, CEO of Meta Platforms [Photo by AP]

◆ Emphasizing Efficiency and Profitability over Innovation and Growth: 'McKinsey Zuck'

On the 30th (local time), the U.S. economic media Business Insider reported, citing multiple sources close to CEO Zuckerberg, that he has recently been increasingly showing traits of a 'McKinsey Zuck' who has adopted Wall Street management methods. The media described this as 'Mark Zuckerberg version 3.0.'

If CEO Zuckerberg, who started his business as a Harvard student, is considered version 1.0 as 'Harvard Zuck,' and his leadership style during business growth in Silicon Valley is version 2.0 as 'Silicon Valley Zuck,' then his current persona is described as 'McKinsey Zuck.'

According to the report, Silicon Valley-style CEOs prioritize innovation as a core value. They boldly invest in new technology development even if it incurs some costs. This style suits the rapid growth phase of startups. In contrast, Wall Street-style CEOs emphasize efficiency and profitability. They focus more on organizational stability than growth, using this as a foundation to win over investors.

Ultimately, the emergence of 'McKinsey Zuck' indicates that CEO Zuckerberg has shifted his focus from innovation and growth to profitability and stability.

[Image source=AP Yonhap News]

This change can be seen in his statements. CEO Zuckerberg has declared this year as the 'Year of Efficiency' and is carrying out large-scale layoffs. When he first executed a massive layoff in Meta's history in November last year, he expressed regret, saying, "I want to take responsibility for this decision. I know this is hard for everyone, and I am sorry to the employees who were laid off." However, this year, he has changed his tone and attitude, stating, "Profitability enables innovation."

◆ Three Crises That Confused Zuckerberg

Business Insider interpreted CEO Zuckerberg's change as intertwined with Meta's business growth cycle.

From Facebook's initial public offering (IPO) in 2012 until the company changed its name to Meta Platforms in 2021, Meta experienced rapid growth. Facebook's monthly active users increased from 1 billion to 3.5 billion, and the company's market value rose from $100 billion (approximately 127.6 trillion KRW) to over $1 trillion. Although Zuckerberg personally appeared before Congress amid criticisms that SNS spread false information and collected massive amounts of personal data, the business growth trend continued.

However, since 2021, Meta has shown a downward trend. CEO Zuckerberg had to cope with unprecedented declines in revenue and platform users.

The biggest blow came from Apple's privacy policy introduced in April 2021. This policy severely impacted Meta's core SNS business of personalized advertising, which accounts for over 90% of its revenue. Apple's policy requires iOS users to individually consent to the use of their personal data, leading to an increase in users refusing consent, making personalized advertising difficult.

[Image source=Reuters Yonhap News]

A former Meta executive explained, "Apple's situation was much more severe than they stated," adding, "It worsened conditions across all departments of the company (Facebook)." At the time, Meta also informed shareholders that Apple's policy changes were expected to cause a $10 billion hit to advertising revenue in 2022 alone.

The global rise of Chinese SNS TikTok also shook Meta's SNS dominance, including Facebook and Instagram. Additionally, Zuckerberg's focus on the metaverse, even changing the company name, led to massive future investment costs, which the market viewed negatively.

Moreover, the departure of COO Sheryl Sandberg and CTO Mike Schroepfer, who had stably managed the company while Zuckerberg pursued Silicon Valley-style innovation and growth, increased external concerns about the company.

Business Insider stated, "With inflation soaring and recession fears growing, investors no longer cared about the innovative plans presented by Silicon Valley Zuck," adding, "They wanted responsible management that could run the company smoothly and profitably."

As bad news piled up, CEO Zuckerberg was thrown into confusion. He once said on a podcast last year, "Waking up every morning as Meta CEO feels like getting punched in the stomach." In this situation, Business Insider explained that he chose to transform himself into a CEO style preferred more on Wall Street than Silicon Valley as part of the problems he needed to solve.

◆ "Increasing Efficiency to Make the Company Attractive for Investment"... Stock Price Up 160% This Year

CEO Zuckerberg appears to have rapidly changed his management style since last year. A source told Business Insider that Meta commissioned consulting firm Bain & Company last year to analyze Meta's cost issues during its crisis, and the results significantly changed CEO Zuckerberg. This process led to calls for mass layoffs of low performers, resulting in Meta's first layoffs in November of the same year.

[Image source=Reuters Yonhap News]

Since November last year, Meta has laid off more than 20,000 employees, but additional layoffs are expected this year. Although CEO Zuckerberg stated in May that there would be no more large-scale layoffs, Meta reportedly aims to reduce its workforce to 2020 levels, which is 5,000 fewer employees than currently.

Prioritizing profitability and efficiency, CEO Zuckerberg said this year, "Operating the company more efficiently will secure the resources and trust needed to achieve our long-term vision, making it a better place to work and more attractive for investment."

Business Insider reported that the market response has been positive. Bernstein analyst Mark Shmulik said, "He has chosen a new theme and is fully committed to it. This is exactly what investors want." Among investors, there is also an assessment that although Meta's high growth is over, CEO Zuckerberg made a wise choice by recognizing that money is not free.

Meta's stock price plummeted more than 40% last year amid high inflation, interest rate hikes, and recession fears but has surged over 160% this year alongside the market's upward trend.

This content was produced with the assistance of AI translation services.