Facebook's (FB) continues to take its lumps and it is affecting company morale.
Earlier this week, the Menlo Park, California headquartered social media behemoth fell to seventh place on employment site Glassdoor's annual ranking of employers for 2019, knocking the company from the top spot it held 2018. Meanwhile, a report from the Wall Street Journal highlighted an overall more pessimistic outlook for the company.
Shares have declined slightly this week and they continue to seesaw on Friday, as the company battles to bounce despite the piling on of bad publicity.
"In our opinion, there are plenty of places for unhappy Facebook employees to go in Silicon Valley to do interesting work while feeling better about the impact of its employer and maintaining compensation levels," Stifel analyst Scott Devitt said. "As Facebook tries to rebuild trust outside the company (politicians/regulators, pundits, and consumers), it also need to rebuild the DNA/culture of its company - not an easy task."
Problems are External and Internal
The issues surrounding the company's actions towards users have been much publicized, but the internal strife within the company's ranks could be just as damning.
A recent Facebook employee survey taken by nearly 29,000 employees suggests that 52% were optimistic about Facebook's future, down from 84% in the prior year. Meanwhile, tenure expectations declined by 10% from the prior year.
The findings appear to vindicate Stifel's concerns on the stock.
The Glassdoor reviews that knocked the social media stalwart off of its perch were no more forgiving.
"With an obsession to move fast just for the sake of moving fast, rushed and half-vetted ideas are put through that were not the right decision," one such review reads.
Others took to criticizing upper management directly
"[CEO] Mark Zuckerberg has received good ratings in the past but of late he has been very distracted and not focused on how the company is run internally," another reads, "He should own it and step up by making management changes to course correct the ship before it becomes another AOL."
Many high-profile departures from the company have suggested that the discord does indeed rise all the way to the executive suite.
Oculus CEO Brendan Iribe and Instagram co-founders Kevin Systrom and Mike Krieger all departed from the Facebook fold in the fall amid speculation of creative disagreement, following the lead of WhatsApp co-founders Jan Koum and Brian Acton.
Acton, who has been quite open about his distaste for CEO Mark Zuckerberg, even publicly called for users to #deletefacebook.
It is time. #deletefacebook— Brian Acton (@brianacton) March 20, 2018
The feud between Acton and Facebook executives flared up on public social media posts after an incendiary interview Acton offered to Forbes, adding to the intrigue around the executive squabbling.
"They are business people, they are good business people," Actton said of Zuckerberg's team. "They just represent a set of business practices, principles and ethics, and policies that I don't necessarily agree with."
David Marcus, former president of PayPal (PYPL) and VP of messaging at Facebook, who is currently working to add blockchain features to the platform, hit back at Acton on his personal Facebook page.
"I find attacking the people and company that made you a billionaire, and went to an unprecedented extent to shield and accommodate you for years, low-class," he retorted. "It's actually a whole new standard of low-class."
Time to Turn Over the Reins?
The consistent bad news from the upper echelon of the company has prompted calls for Zuckerberg and COO Sheryl Sandberg to lean out of the picture at the company.
"Further calls for changes to top Facebook management could arise as investors digest recent information about data breaches," William O'Neil, senior equity analyst Derek Higa said in his thesis expecting a FAANG capitulation.
Sandberg in particular has come under fire for her investigations of the controversial billionaire George Soros and inquiries into short sellers on the stock.
The COO has even drawn swipes from former first lady Michelle Obama this week, adding to the bad press.
Not to be outdone, Zuckerberg has come under fire after the publication of a trove of documents by the British Parliament implicating him in the oversight of picking which companies could access Facebook data.
In particular, former Facebook foe Vine was targeted and denied access to information by Zuckerberg personally.
"The files show evidence of Facebook taking aggressive positions against apps, with the consequence that denying them access to data led to the failure of that business," the document release reads.
To be sure, Zuckerberg has fought back against the document release, explaining that it only tells one side of the story.
"I understand there is a lot of scrutiny on how we run our systems. That's healthy given the vast number of people who use our services around the world, and it is right that we are constantly asked to explain what we do," he wrote on his own Facebook page. "But it's also important that the coverage of what we do -- including the explanation of these internal documents -- doesn't misrepresent our actions or motives."
He added that the company is consistently fighting abuse of its apps and will continue to add to efforts to safeguard users from malintentioned actors.
As the company loses allies among the investment community and its own Silicon Valley neighborhood, few may be willing to give him the benefit of the doubt.