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Meta Platforms (NASDAQ:META) announced yesterday plans to cut around 13% of its staff, resulting in approximately 11,000 staff losing their jobs. Moreover, the social media giant extended its hiring freeze through Q1 and said it will be further cutting its discretionary spending.
In an email to staff, CEO Mark Zuckerberg said this was one of “the most difficult changes we’ve made in Meta’s history.” He added that the company expected the move online to take place faster.
“Unfortunately, this did not play out the way I expected,” he said.
Here’s what 5 sell-side analysts have to say about Meta’s announcement.
Jefferies analysts: “While top-line visibility remains limited, we believe the increase expense discipline should offer some valuation support… Even though rev growth could slow further than expected in FY23, we believe the trend of potentially positive revisions could reverse sentiment on META and provide additional support for the near all-time low multiple.”
Raymond James analysts: “We maintain our Outperform rating given: 1) we continue to expect long-term ad growth of 5-10%; 2) we expect continued monetization of newer platforms and formats (e.g., Reels, click-to-messaging); 3) we expect improving margin outlook given recent cost reductions with greater leverage in 2024; and 4) we believe valuation is attractive.”
Citi analysts: “Whereby engagement is growing globally and newer monetization formats are ramping, we believe we are starting to see the early results of these investments and believe the announced expense controls could represent an inflection point in the shares. We now project 2023 GAAP EPS of $8.80 and we reiterate our Buy rating and $168 TP.”
BofA analysts: “We are encouraged to see Meta rationalizing its cost base, which seemed large even for attractive market conditions (stock up 5% vs NASDAQ down 2%). Given our cautious view on 1H’23 Online ad spending (we are below the Street on ’23 revs.) and uncertainty about the Reels transition, we reiterate our Neutral rating.”
MoffettNathanson analysts: “Yesterday’s announcement that CEO Zuckerberg “decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go” is a clear affirmation that this is a rational company led by a CEO who cares about his share price and what investors think of his leadership skills.”
