The latest scandals at Facebook will hurt morale and make it harder to hire during this critical moment, insiders say

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Facebook COO Sheryl Sandberg and CEO Mark Zuckerberg.

• Facebook's latest scandals will hurt hiring efforts and damage employee morale, insiders say.
• A recent New York Times report exposed how senior leadership tried to downplay the company's problems and smear its critics.
• Current and former Facebook employees warn the revelations will further damage already-eroding morale at the company.
• That, in turn, may make it harder for the company to retain and hire good talent - right as it's trying to solve some of its most difficult problems.

Facebook is in crisis, yet again.

This time, the issue how the company attempted to attack its critics with smears that have been accused of fueling anti-Semitism, while pushing to downplay the extent of public disclosures about Russian election meddling in 2016 - revelations exposed by a bombshell New York Times investigation.

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The company went into panic mode, with CEO Mark Zuckerberg defending his position on a conference call with reporters as further leaks spilled out about his working relationship with Sheryl Sandberg, Facebook's COO. So what happens now?

Business Insider spoke to 3 former Facebook employees, and one current worker at the company, to get a feel for what people in the know are expecting Facebook to do next. These insiders warn that employee morale could take a hit - making it harder for Facebook to hire and retain the vital talent it needs to navigate this crisis.

Representatives for Facebook did not immediately respond to a request for comment.

Facebook's scandals are more personal than ever before

Facebook's current woes aren't like past crises the company has weathered, said some insiders.

"If you look back at the history of the company, there are many times when its been attacked from the outside ... but it's often felt like, internally, the leadership is on top of it," one former employee said. This person cited the company's rocky post-IPO period, and the questions over whether Facebook could effectively transition its business to capitalize on the smartphone boom, as examples of problems that Facebook leadership effectively hurdled.

"This time around ... it's actually a criticism of the leadership. This is a new kind of threat that Facebook has not experienced before ... it is the leadership somehow failing ... [a] crisis of confidence in the leadership," said this former employee.

Another former employee blamed some of Facebook's recent crises on the corporate culture built by Zuckerberg and Sandberg, where good news rose to the top and bad news never made it to the CEO's desk.

"I believe they would definitely have been kept in the dark on these issues as long as possible," this person said. "They built an executive culture that incentivized bringing only good news and deflecting bad."

"They will change something as a result. The external message will be something about some people already being gone from [Facebook], others being redeployed, and a new task force or something about doing this better," the person predicted.

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The relentless drumbeat of crises can hurt employee morale at a critical moment

As the scandals have mounted, the change in attitudes towards Facebook over the last year has been dramatic.

"All of a sudden [it] went from a little bit of a darling to there was no safe haven," another former employee said.

"Government hated us, friends started not liking you, press started talking about the constant corrosive effect ... all the hard things that are going on give new people a lot of pause ... 'does this leadership know how to save the company?'"

Part of the problem is Facebook's rapid pace of growth. At the end of 2017, the company had around 25,000 staff, up from 17,000 at the end of 2016. A year prior to that, it was roughly 12,700, and in 2014 it was just over 9,000.

In other words, most employees simply haven't been at the company very long - and this means they may be less incentivized to stick around to clean up the mess and tackle some of the hardest problems that Facebook has yet had to face.

"Most of the company has not been there more than two years, so they have not been ... through a crisis like this, and they might not be emotionally invested in the company like the first thousand might be," an ex-employee said. They summarised employee perceptions of executive attitudes as "hey, we made a bunch of mistakes, and now it's your job to clean it up."

According to a recent leak, Facebook employee morale has already plummeted, with the proportion of employees who are "optimistic about the company's future" dropping from 84% to 52% over the last year.

Where will the buck stop?

It's not yet clear whether we'll see any major departures as a result of the most recent revelations.

One of the former employees suggested it was unlikely, pointing out that top communications exec Rachel Whetstone left back in August, and Elliot Schrage - head of comms and policy - has already announced his intentions to leave.

"Mark and Sheryl aren't going anywhere, no-one else is really worth getting rid of, so I don't really expect to see heads roll," the former employee said.

A current employee, meanwhile, suggested that Joel Kaplan, Facebook's policy boss in DC, might ultimately exit.

Kaplan is Facebook's policy boss in DC, and is a rare conservative at the famously liberal company, having previously served in the Bush White House. Kaplan drew flack from employees earlier this year after publicly appearing in support of his longtime friend Brett Kavanaugh as the then-Supreme Court nominee testified to Congress regarding allegations of sexual misconduct. According to the Times, Kaplan played a key role in the social network's attempts to downplay to the public the spread of misinformation on its platform.

A former employee said that some of Sandberg's lieutenants and other mid-level executives could leave (or be forced out) amid the turmoil.

Meanwhile, it's almost guaranteed that there will be some kind of discipline for those leakers who spoke to the New York Times.

"There will be firings from that. That team is very good at what they do," the former employee added. "Ironically, if those resources had been looking at external manipulation via Facebook, we may not be where we are today."