The firing of 13% of Meta Platforms’ (META) workforce also brought the tech and economic outlook back into the spotlight. In addition to the layoffs, the company is extending a hiring freeze through the first quarter of 2023, and will “roll out more cost-cutting changes” in the coming months. Shares of Meta climbed 5% on Wednesday in response to the news, but remain off 70% YTD amid worries over the platform’s pivot to the metaverse and reckless spending.
Quote: “I know there must be just a range of different emotions. I want to say up front that I take full responsibility for this decision,” Zuckerberg said on a video call after announcing the layoffs. “I’m the founder and CEO, I’m responsible for the health of our company, for our direction, and for deciding how we execute that, including things like this, and this was ultimately my call.”
“And it was one of the hardest calls that I’ve had to make in the 18 years of running the company. And a lot of why it’s hard is, obviously, it has a big impact on your lives, but also for our mission. We’re losing people who… you’ve really put your heart and soul into this place. No matter what team you may have worked on, each of you played a role in contributing to the products that billions of people use to connect every day.”
Outlook: Meta kept its Q4 revenue guidance of $30B to $32.5B unchanged, which is in line with analysts’ consensus estimates of about $31.6B. The 2022 and 2023 expense forecasts provided on the Q3 earnings conference call also factored in the financial impact of the layoffs. Going forward, investors will be keeping an eye on moderating growth and operating margins, as well as additional weakening in the company’s core advertising business.