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Meta Platforms stock gains 6% on slashed expenses forecast; expects to cut 10,000 jobs
© Reuters. Meta Platforms (META) stock gains 6% on slashed expenses forecast; Expects to cut 10,000 jobs
By Senad Karaahmetovic
Meta Platforms (NASDAQ:META) slashed its total expenses forecast for the full year by $3 billion after saying it plans to cut 10,000 more jobs.
Shares are trading nearly 6% higher following the news.
Moreover, the tech giant will close around 5,000 open roles that it hasn't yet hired. The metaverse business also plans to lift hiring and transfer freezes after the restructuring is completed.
"Over the next couple of months, org leaders will announce restructuring plans focused on flattening our orgs, canceling lower priority projects, and reducing our hiring rates. With less hiring, I've made the difficult decision to further reduce the size of our recruiting team," Mark Zuckerberg told employees in an e-mail.
"We will let recruiting team members know tomorrow whether they're impacted. We expect to announce restructurings and layoffs in our tech groups in late April, and then our business groups in late May."
"In our Year of Efficiency, we are focused on canceling projects that are duplicative or lower priority and making every organization as lean as possible," he further noted.
Vital Knowledge analysts said that the "new operating expense number is incremental."
"Assuming the ~$3B opex cut falls straight to the bottom line and given the St forecast for 2023 tax (~21%) and shares outstanding (~2.61B), this works out to about 90c of incremental EPS, or about an 8% increase from the current 2023 consensus of 11.34 (although the fact they are acting on expenses probably suggest their view on revenue is a bit softer than before)," the analysts wrote in a client note.
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