(MENAFN- Baystreet.ca)
Will Meta Platforms Soar Again After More Big Job Cuts?
When Meta Platforms (META) cut 13% of its staff last year, the stock started an incredible ascent, nearly doubling in value. Costs are still too high. The company has too many staff and operating expenses to offset revenue declines from an advertising recession.
Meta may cut the same number of staff in a second round. It will retain its engineering headcount while cutting projects and teams. The stock market will welcome project cancellations. This will force Meta to continue projects that matter to the core business.
Meta is serious about achieving a year of efficiency. That starts with doing more with smaller staff. Those who worked at home may have held two jobs. The efficiency cost hurt Meta's bottom line.
Economic Deterioration
The economic weakness ahead will continue. A recession is highly likely as demand falls. Higher interest rates constrain borrowing activities.
This discourages corporations from lending to invest in growth. Meta shares may soar toward previous levels. Wall Street likes companies that trim costs aggressively.
Risks
Meta is stubbornly investing heavily in a metaverse. The usage will continue to fall as users scoff at buying a VR headset. Meta should consider improving its mobile app first. This costs less and returns more to the bottom line.
MENAFN14032023000212011056ID1105777128
Legal Disclaimer:
MENAFN provides the information “as is” without warranty of any kind. We do not accept any responsibility or liability for the accuracy, content, images, videos, licenses, completeness, legality, or reliability of the information contained in this article. If you have any complaints or copyright issues related to this article, kindly contact the provider above.