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Altimeter Capital Chair and CEO Brad Gerstner stated in an open letter to the corporate and CEO Mark Zuckerberg on Monday that Meta has too many staff and is transferring too slowly to retain the boldness of traders.
The Meta investor really useful a plan to get the corporate’s “mojo back,” together with lowering headcount bills by 20% and limiting the corporate’s dear investments in “metaverse” know-how — VR software program and {hardware} — to not more than $5 billion per yr.
“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,” Gerstner wrote within the letter. “In short, Meta needs to get fit and focused.”
The letter is the newest signal that Meta traders are beginning to categorical reservations in regards to the firm’s current efficiency. Meta inventory is down over 61% in 2022.
At the top of the second quarter this yr, Altimeter Capital held greater than 2 million shares of Meta.
It’s additionally a vote of much less confidence in regards to the firm’s ambitions on the planet of digital and augmented actuality. Meta modified its firm title from Facebook to higher focus on its VR {hardware} and software program and is spending $10 billion per yr on the know-how.
On Oct. 11, Meta introduced a brand new high-end VR headset, the Quest Pro. However, there are few indicators that VR or a number of the firm’s metaverse apps, corresponding to Horizon Worlds, are catching on with the general public past early adopters.
“In addition, people are confused by what the metaverse even means,” Gerstner wrote. “If the company were investing $1-2B per year into this project, then that confusion might not even be a problem.”
He stated the cash the corporate is presently spending to develop VR might add up for a decade earlier than it comes to fruition.
“An estimated $100B+ investment in an unknown future is super-sized and terrifying, even by Silicon Valley standards,” Gerstner wrote.
Ultimately, Gerstner stated, Meta has too many individuals and is spending an excessive amount of on capital expenditures. If Meta was ready to management these prices, he stated, then it might double its free money movement and enhance its share value.
He stated a 20% lower in worker spending would take Meta again to the degrees of staffing it had final yr and argued that the corporate cannot spend because it used to since the price of capital and rates of interest have risen lately.
In the letter, Gerstner stated Altimeter Capital does not have calls for and easily needs to have interaction with Meta administration.
Meta did not instantly reply to a request for remark.
“We think the recommendations outlined above will lead to a leaner, more productive, and more focused company — a company that regains its confidence and momentum,” Gerstner wrote.
