Meta Investor Calls for Major Changes

Ahead of its latest earnings report tomorrow, the head of a technology-focused hedge fund called on Meta Platforms (META) to slash its workforce and pull back spending on its metaverse technology, saying it’s time for the social media giant to “get fit.”

Brad Gerstner, founder and CEO of Altimeter Capital, wrote in an open letter to CEO Mark Zuckerberg and the board that Meta “needs to get its mojo back,” and rebuild confidence with investors, employees, and the tech community.

Gerstner pointed to the decline in the firm’s stock price and price-to-earnings ratio (P/E). He argued Meta has “drifted into the land of excess,” adding it has had a lack of focus and fitness, which is “deadly when growth slows and technology changes.”

Gerstner said Meta needs to cut headcount expense by at least 20%, and reduce annual capital expenditures by at least $5 billion from $30 billion to $25 billion. 

Metaverse Spending Reductions

He wants investment in the metaverse to be no more than $5 billion annually. Just last year, the company changed its name from Facebook to Meta as part of its move to more fully embrace the future of virtual reality. 

Altimeter Capital is reported to hold 2.5 million shares, or a 0.11% stake, in the company. 

Shares of Meta Platforms are higher today ahead of the company's earnings report, but have lost 60% of their value so far this year.