4 Meta Platforms Analysts On 'Ominous' 10K Layoffs

Shares of Meta Platforms Inc META came under pressure in premarket trading on Wednesday, after the company announced further layoffs.

• Raymond James analyst Aaron Kessler maintained an Outperform rating, while raising the price target from $220 to $238.
• Oppenheimer analyst Jason Helfstein reiterated an Outperform rating and price target of $260.
• Bernstein analyst Mark Shmulik reaffirmed an Outperform rating, while raising the price target from $210 to $225.
• Wolfe Research analyst Deepak Mathivanan maintained an Outperform rating, while raising the price target from $220 to $230.

Check out other analyst stock ratings.

Raymond James

The company has placed a freeze on its 5,000 open jobs and announced to layoff an additional 10,000 positions, Kessler said in a note. “Combined with the November announcements, the layoffs would represent over 21,000 employees or ~24% of 2022 year-end headcount."

“Given the additional headcount reductions, Meta now expects 2023 total expenses to be in the range of $86-92B (vs. $89-95 billion previously),” the analyst further wrote.

Oppenheimer

“Layoffs are expected to reduce GAAP '23 expenses, ex. severance and restructuring $6B, resulting in '23 organic GAAP expense guidance of $85B vs. previous $91B,” Helfstein wrote in a note.

“Restructuring/one-time expenses are guided to $4B vs. previous $1B. Plan involves a "rolling" schedule through 2023 from canceling lower priority projects, reducing hiring rates and cutting the additional 5K open roles that haven't yet been filled,” he added.

Bernstein

“With the bulk of cost takeout benefits likely now underwritten, attention shifts back to growth,” Shmulik said. “Ominously, Zuckerberg suggested that the weaker operating environment may persist for some time, and likely explains the depth of the cost reduction efforts."

“We believe Meta is well positioned to re-capture market share, while engagement continues to track in the right direction — the AI investments are paying off,” the analyst further stated.

Wolfe Research

Zukerberg also laid out operating principles for the company, which should position it well to “execute faster under a leaner, flatter org structure with a narrowed focus,” Mathivanan stated. “META did not update its revenue guidance, which we find reassuring given the increased macro uncertainty recently."

META Price Action: Shares of Meta Platforms declined by 1.23% to $191.64 in premarket trading on Wednesday.

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