The news: Meta’s stock rebounded and the company briefly enjoyed $500 billion in market capitalization, making Meta the best performer in the S&P Index since November.
Paving the way to recovery: Meta’s shares rose as much as 25% in trading Thursday after CEO Mark Zuckerberg vowed to make the social media company leaner.
- Zuckerberg is embracing his role as Meta’s chopper-in-chief.
- The company will likely implement more layoffs and divest itself of underperforming business units as it enters its “year of efficiency.”
- Meta is reportedly canceling multiple data center projects and closing and merging offices.
Meta’s layoffs were costly: The company may have spent more than $88,000 per employee to cut 13% of its global workforce, per Insider.
- The cost of reducing headcount in the company’s most significant job cut ever could indicate continued expenses as the company scrambles to recover.
- Meta’s “move fast and break things” mantra might be applied to job cuts, which could result in brain drain within the company.
- Layoffs will likely continue to cost Meta money, eating into any short-term gains.
But what about the metaverse? To the delight of Wall Street analysts, Meta’s year-old pivot into a VR metaverse platform provider was hardly mentioned during the earnings call. Instead, Meta’s messaging focused on potential growth businesses like advertising, content feeds, and Reels.
Our take: Meta will continue to play the shell game, focusing on growth segments and profits, while keeping metaverse developments and expenditures on the down low.