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Those employees have seen more than $8 billion in wealth wiped out since the IPO, as their shares have lost almost half their value. While individual holdings vary widely, that represents an average loss of $2 million on paper for each of Facebook’s 4,000 employees.
“That’s always a concern,” said Brandon Cherry of the Hay Group, a human resources consulting firm that advises companies in Silicon Valley’s competitive labor market. In addition to rival startups looking for talented engineers, he said, bigger companies like Google “may have an opportunity to pull some people out of Facebook.”
Even so, most Facebook employees are not facing an issue that has surfaced at other tech companies, which grant options to buy stock at a certain price. With options, the employee only makes money if the stock goes higher. Most of Facebook’s employee shares were granted outright, so they still have value at the market price, even if that has declined sharply.
“They’re going to have some people leave. But I’d be really surprised to see mass defections of employees,” said Stanford University business professor Paul Oyer, an expert on labor economics. “The company is still doing well.”
In recent weeks, Zuckerberg has told workers that outsiders may not know or understand Facebook’s plans. The sliding stock price is painful for some employees, Zuckerberg acknowledged at a companywide meeting, according to The Wall Street Journal, but he urged workers not to obsess over it.
Investors, however, are still worried about Facebook’s challenges, said Rick Summer, a financial analyst at Morningstar. The company may be building its business, he added, “but I don’t think that message has been communicated well to the investing public.”