Mark Zuckerberg is facing headwind from within his own ranks. In an open letter, an investor sharply criticizes the meta-CEO – he should primarily save on personnel costs in the future and spend less money on the metaverse.
It was only in the summer of last year that Mark Zuckerberg presented the plans for his Metaverse. A project that costs the US company a lot of money.
But precisely this circumstance does not only find supporters. That is why investor Brad Gerstner, Chairman and CEO of Altimeter Capital, nine has written an open letter.
Meta: What is the open letter about?
In it, the investor addresses CEO Mark Zuckerberg directly. Gerstner wrote it “with some hesitation” but now shares it with “great conviction.”
Like many other companies in a world of zero interest rates, Meta has drifted into the land of plenty – too many people, too many ideas, too little urgency.
The group needs to be more focused in the future, he said. After all, a lack of it is only inconspicuous in times of growth, he says. If growth slows and technology changes, that lack can be “lethal.”
Investor orders layoffs and less spending on the Metaverse
In his open letter, Gerstner recommends a three-step plan for the company. That way, he said, the group could double its free cash flow to $40 billion annually.
Meta needs to restore the confidence of investors, employees and the tech community to attract, inspire and retain the best people in the world.
To do so, however, it would need to cut personnel costs by at least 20 percent. The company should reduce annual investments by at least five billion to around $25 billion.
But it’s not just Mark Zuckerberg who gets his comeuppance in the open letter. Investor Brad Gerstner also sharply criticizes his plans for the Metaverse.
What is the Metaverse anyway?
He says people are confused about what the Metaverse is all about. It “might not even be a problem” if Meta only put one to two billion dollars a year into the project.
An estimated investment of more than $100 billion in an unknown future is outsized and daunting, even by Silicon Valley standards.
Instead, he said, the company wants to put between ten and 15 billion dollars a year into the Metaverse. It could take up to ten years for the project to turn a profit. In his letter, Gerstner therefore calls for this spending to be limited to five billion U.S. dollars annually.
Poor sales figures frustrate meta-investors
Less than a year after plans for the Metaverse were made public, the group had to announce its first drop in sales since going public in 2012.
Investors:inside are likely to be anything but happy about this. Among them is Altimeter Capital – the company held more than two million Meta shares at the end of the second quarter.
According to Gerstner, the Meta share has fallen by 55 percent in the past 18 months. However, this decline is not only an indicator of “the bad mood on the market”.
This drop in the share price reflects lost confidence in the company.
Meta has “more reach, more relevance, and more incredible growth opportunities” than many other platforms in the world. Therefore, Meta needs to “regain its mojo” and move into the future “fit and focused.”