In an open letter to Mark Zuckerberg that came out today, one of the biggest investors in Meta Platforms Inc. had a lot to say about the company’s future.
The letter, written by Altimeter Capital Chair and Chief Executive Brad Gerstner and posted on Medium, didn’t hold back.
Gerstner said that Meta has too many employees and spends too much money on its goal of making the metaverse a global reality.
“It’s with some hesitation, but significant conviction, I am sharing an open letter strongly encouraging Meta to streamline and focus its path forward. Like many other companies in a zero rate world — Meta has drifted into the land of excess — too many people, too many ideas, too little urgency. This lack of focus and fitness is obscured when growth is easy but deadly when growth slows and technology changes,” he said.
Meta has become like many other companies in a world with no interest rates: there are too many people, too many ideas, and not enough urgency. This lack of focus and fitness is hard to see when growth is easy, but it is deadly when growth slows and technology changes.
Meta has been working on making the Facebook app look more like TikTok lately because the number of users is going down. This year, the number of users dropped for the first time ever, and in February, the company lost $230 billion in market value.
In July, the company said it would cut its staff, but it was sure about its long-term investment in the metaverse.
In September, it was said that Meta planned to lay off 10% of its employees.
This hasn’t made Gerstner happy, and he has warned that Meta is now losing the trust of its investors, even though its core business is “one of the largest and most profitable” in the world.
He said that in order to rebuild confidence, Meta needs to “get its mojo back” and “get fit and focused. He suggested some solutions, starting with the idea that the company needs to let go of “at least 20%” of its employees, not just 10%.
He wants Meta to cut capital spending by $5 billion and invest no more than $5 billion in the metaverse, including Reality Labs.
“It’s not much of a secret in Silicon Valley that companies like Google, Meta, Twitter, and Uber could make the same amount of money with a lot less staff. I would take it a step further and argue that these incredible companies would run even better and more efficiently without the layers and lethargy that comes with this extreme rate of employee expansion.”
As for investments in capital expenditures, the letter criticized Meta’s spending, saying that it was more than what a lot of big tech companies spent all together.
Like Zuckerberg, Gerstner thinks that augmented reality and artificial intelligence are the way of the future. However, he says that Meta needs to ease up on spending in these areas in the future.
Gerstner thinks that too much weight has been put on the metaverse since the company changed its name to Meta and spent so much money on it. “People don’t really know what the metaverse is,” he said.
The main criticism was that there are better ways to spend money, and maybe you shouldn’t gamble with it so much.
He also said that these are not orders, but suggestions. “We simply wanted to further engage and continue sharing our thoughts as an interested shareholder,” he said. “We believe in this team. We know Meta has more reach, more relevance, and more incredible opportunities for growth than almost any platform on the planet. And we are confident that your long-term investments in AI and the next generation of communications will continue to drive us all forward.”
IMPORTANT DISCLAIMER: All content provided on this website, any hyperlinked sites, social media accounts and other platforms is for general information only and has been procured from third party sources. We make no warranties of any kind regarding this content. None of the content should be interpreted as financial, legal, or other advice meant to be relied on for any purpose. Any use or reliance on this content is done at your own risk and discretion. It is your responsibility to conduct research, review, analyze, and verify the content before relying on it.