Meta Platforms could unveil the biggest job cuts in its 18-year history later this week, the Wall Street Journal reported Sunday.
Meta Platforms (META) shares moved firmly higher Monday following a weekend report from the Wall Street Journal that suggested the social media group is planning to unveil ‘large scale’ layoffs over the coming days.
The Wall Street Journal reported Sunday that Meta could announce thousands of layoffs later this week, amid a broader pullback in ad spending and losses in the group’s developing metaverse business that helped deliver a disappointing set of third quarter earnings and a grim near term outlook earlier this month.
Meta CFO Dave Wehner told investors on October 26 that the group expects hiring to slow “dramatically” in the coming months, but said that the group’s overall headcount — pegged at 87,000 — would remain “roughly flat next year relative to current levels … with new hiring investment only in our highest priorities.”
Meta shares were marked 3.6% higher in pre-market trading to indicate a Monday opening bell price of $94.08 each, a move that would still leave the stock nursing a year-to-date decline of around 72%.
Late last month, Meta posted weaker-than-expected third quarter earnings and cautioned that its metaverse division would post deeper net losses over the coming year.
Meta said it would “meaningfully” ramp-up investments in Reality Labs, the division that will house the company’s metaverse plans and has absorbed more than $9.4 billion in losses over the first nine months of the year, as the social media group continues to transition from its Facebook roots.
The choice to double-down on the expensive enterprise, which will add at least another $4 billion to next year’s capital spending plans — now pegged at between $30 billion to $34 billion for the coming year — more than offset some modest positives from Meta’s underlying social media business.
Looking into the final three months of the year, Meta said it sees revenues in the region of $30.0 billion to $32.5 billion, a range that fall under the Street forecast of $32.3 billion.