Meta shareholder tells company to cut staff, ‘get fit and focused’

Meta investor Altimeter Capital called on the company to cut its staff and to limit its investments on expanding into the virtual reality metaverse world in an open letter published Monday.

The letter from Altimeter Chairman and CEO Brad Gerstner was published two days before Meta is scheduled to release its earnings for the third quarter, the latest announcement since Meta reported its first ever revenue drop in July.

Gerstner cites Meta’s declining stock, down 55 percent in the last 18 months, and falling price per earnings ratio, as reasons Meta needs to make changes to “get its Mojo back.”

To do so, Gerstner suggests Meta cut stuff by at least 20 percent, reduce its annual capital expenditure by at least $5 billion, and limit investments in the metaverse to no more than $5 billion per year. 

“In short, Meta needs to get fit and focused,” he wrote. 

Altimeter Capital held more than 2 million shares of Meta at the end of the second quarter, according to CNBC.

Gerstner’s said the suggestion to cut at least 20 percent of employee-related expenses by the start of next year would put Meta back to its mid-2021 level of employee costs. He also said Altimeter is confident the employees will find replacement jobs and “quickly be back to work,” stating that large companies have made it difficult for start-ups to hire. 

The call for Meta to rein in its investment in the metaverse comes as the company has shifted its brand to focus on the virtual reality expansion, going so far as rebranding under the name Meta instead of Facebook. 

Gerstner said the investment in the metaverse, while smaller than the increase in artificial intelligence, “has gotten the most attention and has led to much confusion.”

“In addition, people are confused by what the metaverse even means,” he wrote. 

Instead of the course Meta is on, he suggests the $5B per year cap on metaverse investments along with setting “more discrete targets and measures of success.” 

The suggested spending cuts will lead to a “leaner, more productive and more focused company,” he said.