Facebook Parent Meta Asked by Shareholder to Cut Jobs, Spending in Open Letter to CEO Mark Zuckerberg

Meta shareholder Altimeter said huge investments "in an unknown future is super-sized and terrifying, even by Silicon Valley standards".

Facebook Parent Meta Asked by Shareholder to Cut Jobs, Spending in Open Letter to CEO Mark Zuckerberg

Photo Credit: Unsplash/ Julien Tromeur

Meta has spent billions and hired thousands of employees around the world to build the metaverse

Highlights
  • Altimeter said annual free cash flow can be doubled if it cut headcount
  • Reality Labs unit lost $5.8 billion in the first six months of the year
  • Meta had in June cut plans to hire engineers by at least 30 percent

Facebook-parent Meta Platforms needs to streamline by cutting jobs and capital expenditure, its shareholder Altimeter Capital Management said on Monday in an open letter to Chief Executive Mark Zuckerberg.

The company has lost investor confidence as it ramped up spending and pivoted to the metaverse, the technology-focused hedge fund with a 0.1 percent stake said, and suggested a three-step plan.

Altimeter said annual free cash flow can be doubled to $40 billion (roughly Rs. 3,30,700 crore) if it cut headcount by at least 20 percent, trimmed capital expenditure by at least $5 billion (roughly Rs. 41,300 crore) to $25 billion (roughly Rs. 2,06,700 crore) a year and capped annual investment in the metaverse to $5 billion (roughly Rs. 41,349 crore) instead of the current $10 billion (roughly Rs. 82,695 crore).

Meta has spent billions and hired thousands of employees around the world to build the metaverse, which refers to a shared digital environment that uses augmented or virtual reality technology to make it feel more realistic.

But the company's dreams have fallen short as the Reality Labs unit, which works on augmented and virtual reality, has continuously reported staggering losses. It lost $5.8 billion (roughly Rs. 47,968 crore) in the first six months of the year.

Altimeter said such huge investments "in an unknown future is super-sized and terrifying, even by Silicon Valley standards".

Meta Platforms, which is set to report third-quarter results on Wednesday after markets close, did not immediately respond to a Reuters request for comment.

Brad Gerstner, Altimeter's chair who encouraged aggressive investment in artificial intelligence, said the firm wanted to engage with Meta and did not have any demands.

The social media company had in June cut plans to hire engineers by at least 30 percent, with Zuckerberg warning employees to brace for an economic downturn.

© Thomson Reuters 2022


5G is here. Should you buy a 4G phone? We discuss this on Orbital, the Gadgets 360 podcast. Orbital is available on Spotify, Gaana, JioSaavn, Google Podcasts, Apple Podcasts, Amazon Music and wherever you get your podcasts.
Affiliate links may be automatically generated - see our ethics statement for details.
Comments

For the latest tech news and reviews, follow Gadgets 360 on Twitter, Facebook, and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel.

Further reading: Meta, Altimeter, Facebook, Metaverse
OnePlus Nord N300 5G With MediaTek Dimensity 810 SoC Launched: Price, Specifications
Bitcoin, ETH Open With Losses, Most Altcoins Tag Along
Share on Facebook Tweet Snapchat Share Reddit Comment google-newsGoogle News
 
 

Advertisement

Follow Us

Advertisement

© Copyright Red Pixels Ventures Limited 2023. All rights reserved.