Shareholder urges Meta to get lean; proposes cuts on jobs, spending and metaverse investment
Ahead of Meta’s release of its Q3 result this week, the company’s shareholder has urged the company to cut headcounts, reduce spending and limit investment in the metaverse, quoting the loss of confidence amongst investors.
Brad Gerstner, founder of Altimeter Capital, expressed disappointment in Meta’s sudden pivot to the metaverse and the company’s underperformance this year in an open letter.
To increase the company’s free cash flow, Gerstner recommends a three-step plan that involves cutting headcount cost by at least 20%, reducing capital expense until revenue picks up and importantly, limiting investment in the metaverse to no more than US$5 billion (A$7.9 billion).
“Meta has drifted into the land of excess — too many people, too many ideas, too little urgency,” the article stated.
“In addition, people are confused by what the metaverse even means.”
“Meta needs to re-build confidence with investors, employees and the tech community in order to attract, inspire, and retain the best people in the world. In short, Meta needs to get fit and focused.”
However, according to Bloomberg, Altimeter Capital holds 2.5 million shares representing 0.11% of Meta’s outstanding stock. Therefore, further push for changes in the company may require more shareholders to get behind the cause.
Meta’s share price is down around 60% since its rebrand from Facebook almost a year ago.
The company reported a drop in revenue in Q2 earnings to $28.82 billion (A$45.48 billion). Wall Street forecasts Meta’s Q3 revenue to be US$27.41 billion (A$43.22 billion).
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