Meta Platforms Inc (NASDAQ: META) opened in the green again this morning after the tech behemoth said it was cutting 13% of its global workforce.
Meta is laying off over 11,000 employees
The layoff will affect more than 11,000 employees in total. In a letter to employees, CEO Mark Zuckerberg also said:
We’re also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1.
The announcement arrives only weeks after the multinational reported a 19% year-on-year increase in its third-quarter costs and expenses that concerned investors.
Meta Platforms also revealed a severance package for the laid off employees on Wednesday. Shares of the tech titan have now recovered over 15% from its year-to-date low last week.
Rich Greenfield’s take on the layoff
Reacting to the news on CNBC’s “Squawk Box”, Rich Greenfield – the Co-Founder of LightShed Partners dubbed it a “sideshow” – one that didn’t fix the fundamental issue at Meta Platforms.
The major issue is that they’re not growing anymore. Their products are not wowing consumers. They have to innovate their way out of this, they can’t cost cut their way out of this. It doesn’t fix the problem.
In its latest reported quarter, operating income was down 46% versus last year and the Nasdaq-listed firm isn’t upbeat about the holiday quarter either.
There’s been talks of a ban on TikTok in the United States, but Greenfield doesn’t see that happening and, therefore, doesn’t see it as a reason to invest in Meta shares.