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The company lost investor confidence as it ramped up spending and refocused on metaverse, a tech-focused hedge fund with a 0.1% stake, and proposed a three-stage plan.
Meta Platforms, the parent company of Facebook, needs to streamline by cutting jobs and capital spending, its shareholder Altimeter Capital Management said in an open letter to CEO Mark Zuckerberg on Monday.
The company lost investor confidence as it ramped up spending and refocused on metaverse, a tech-focused hedge fund with a 0.1% stake, and proposed a three-stage plan.
Altimeter said annual free cash flow can double to $40 billion if it cuts headcount by at least 20%, cuts capital spending by at least $5 billion to $25 billion a year, and limits annual meta-investment to $5 billion from the current $10 dollars. billion.
Meta has spent billions and hired thousands of employees around the world to build metaversion, which refers to a shared digital environment that uses augmented or virtual reality technology to make it appear more realistic. However, the company’s dreams have failed as the Reality Labs unit, which works on augmented and virtual reality, continues to report staggering losses. It lost $5.8 billion in the first six months of the year.
Altimeter said such huge investments “in an unknown future are extraordinarily large and terrifying, even by Silicon Valley standards.”
Meta Platforms, which is scheduled to report third-quarter results after markets close on Wednesday, did not immediately respond to a Reuters request for comment.
Brad Gerstner, Altimeter’s chairman, who has supported aggressive investment in artificial intelligence, said the firm wants to work with Meta and has no requirements.
The social media company cut plans to hire engineers by at least 30% in June, with Zuckerberg warning employees to brace for an economic downturn.
