Meta must slash metaverse spending, headcount to ‘get mojo back’

$Meta Platforms (META.US)$ has lost focus and its shares are underperforming peers. The firm holds 2.5 million shares representing 0.11 per cent of outstanding stock, Bloomberg data show. Meta shares dropped 3.4 per cent to US$125.62. in New York on Monday morning. They are down 63 per cent this year, compared with a drop of about 30 per cent in the Nasdaq 100 Index.
The name change heralded the company’s intent to stake its future on a new computing platform where people will congregate and communicate in a virtual environment. But with revenue growth slowing it’s already had to cut costs and freeze hiring to cope with a fierce competition for users’ attention.
To double free cash flow to US$40 billion a year the company must reduce headcount expense by at least 20 per cent, cut annual capex by at least US$5 billion, to US$25 billion, and limit investment in the metaverse and Reality Labs to no more than US$5 billion a year.
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