October 25, 2022
Altimeter Capital Management, a Meta shareholder, urged CEO Mark Zuckerberg in an open letter to optimize by cutting jobs and spending.
Altimeter, a technology-oriented hedge fund with a 0.1% stake, claimed that Meta had lost investor confidence by increasing spending and turning to the metaverse, adding that huge investments in an unknown future of Metaverse were outsized and frightening.
According to Altimeter, annual free cash flow could be doubled to $40 billion by reducing staff by at least 20%, reducing capital expenditures by at least $5 billion to $25 billion annually, and capping annual investment in the metaverse at $5 billion instead of the current $10 billion.
Meta has spent billions of dollars and hired thousands of people around the world to create the metaverse, a shared digital environment that uses augmented reality or virtual reality technology to make it appear more realistic.
Altimeter Chairman Brad Gerstner, who has pushed for significant investment in artificial intelligence, said the company wanted to interact with Meta but did not make any demands.
In June, Meta reduced its ambitions to hire engineers by at least 30%, and Mark Zuckerberg advised his employees to prepare for an economic slowdown after the company’s dreams failed to materialize, as the Reality Labs unit, which specializes in augmented and virtual reality, posted staggering losses.
The sources for this piece include an article in Reuters.
