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Facebook Cuts Costs as Meta Platforms Stock Tanks

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1 year ago

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meta platforms

Facebook parent Meta Platforms posted earnings that fell short of forecasts on Wednesday, plunging the company’s stock in after-hours trading as the social media giant with metaverse ambitions scrambles to slash expenses amid advertising headwinds caused by global economic concerns.

The claim comes less than a month after billionaire CEO Mark Zuckerberg outlined massive cost-cutting plans that included restructuring teams and implementing a hiring freeze.

According to Forbes, Meta reported a net income of $4.4 billion, or $1.64 per share, down 49% year on year and falling short of analyst forecasts of $1.89 per share; revenue of $27.7 billion was somewhat higher than the $27.4 billion forecasted, but down 4% year on year.

The corporation also stated that its revenue for the current quarter would be between $30 billion and $32.5 billion, which is at the lower end of average analyst projections.

Meta shares fell 11% to $115 soon after the report, bringing losses to more than 61% this year, significantly worse than the Nasdaq’s 30% drop.

Bank of America analyst Justin Post downgraded Meta shares to a neutral rating in a pre-earnings note, stating that the company’s investment in the immersive virtual reality world known as the metaverse “will remain [an] overhang” on the stock, costing an estimated $10.7 billion next year even as economic concerns potentially intensify.

Facebook Cuts Costs as Parent Meta Stock Tumbles in 4th Quarter

Meta Platforms Restructuring

The report comes less than a month after Meta Platforms revealed plans to cut costs by restructuring some departments and putting a hiring freeze as ad revenue growth slows amid growing economic pressures:

On Monday, an investor with more than $300 million in stock asked the corporation to cut costs further by laying off workers.

In the earnings release, Meta Platforms CFO David Wehner stated that the company has “increased scrutiny on all areas of operating expenses,” but it also stated that its employee headcount would remain roughly flat from current levels next year; in the third quarter, the company’s free cash flow, which measures cash left over after operating expenses, fell to $173 million from $9.5 billion a year ago.

$47.2 billion in total. That was the value of Meta founder Mark Zuckerberg, 38, after the market closed on Wednesday.

Zuckerberg’s fortune, once valued at more than $130 billion, has dropped by more than 60% since Meta stock peaked in September 2021.

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Meta Platforms Investor Urges CEO Mark Zuckerberg to Cut Costs

Mr. Zuckerberg, according to Altimeter Capital Chief Executive Brad Gerstner, must take urgent actions to streamline Meta’s operations and address a precipitous drop in the share price.

“Like many other organizations in a zero-rate environment,” Mr. Gerstner wrote in the letter, “Meta has gone into the realm of excess—too many people, too many ideas, too little urgency.” “Meta needs to rediscover its mojo.”

Meta Platforms shares have fallen more than 50% in the last 18 months, slashing the company’s market worth by more than $600 billion. On Wednesday, Meta will disclose profits after the bell.

Meta did not respond to the letter. Altimeter did not reply immediately to a request for comment.

According to FactSet, Altimeter, which manages over $18 billion, owned around 2.5 million Meta shares at the end of the second quarter. This position, at around $320 million, is not among Meta’s top 15 institutional shareholders.

Mr. Gerstner stated that his firm, which is based in Boston and has operations in Meta’s hometown of Menlo Park, Calif., has been a longtime shareholder in the company but now believes it needs to “become fit and focused.”

Mr. Gerstner stated that Meta should slash headcount expenses by 20%, reflecting the opinions of others who have recently suggested that digital businesses have become bloated with too many staff after years of expansion.

“It’s a well-kept secret in Silicon Valley that firms like Google, Meta, Twitter, and Uber could produce comparable levels of revenue with significantly fewer workers,” he claimed.

Meta reported 83,553 employees at the end of the second quarter, a 32% increase from the previous year.

Like many other IT companies, Meta has been slashing costs for months, dealing with slowed growth and growing competition.

Mr. Gerstner also advised the business to reduce its investment in the metaverse, which Mr. Zuckerberg has hailed as the company’s future and estimated would require more than $10 billion in annual spending.

Mr. Gerstner advised the corporation to cap its spending at $5 billion per year, describing Meta’s commitment as “super-sized and alarming, even by Silicon Valley norms.”

Despite enormous investment thus far, the company is falling short of its metaverse aspirations to create an immersive online experience where users may work, buy, and play.

According to The Wall Street Journal, their primary metaverse service for consumers, Horizon Worlds, has less than 200,000 monthly active users.

“People are perplexed as to what the metaverse even is,” Mr. Gerstner wrote.

Mr. Gerstner emphasized that he was not making demands and believed in Meta’s future.

Source: WSJ, Forbes, VOR News

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Geoff Thomas is a seasoned staff writer at VORNews, a reputable online publication. With his sharp writing skills and deep understanding of SEO, he consistently delivers high-quality, engaging content that resonates with readers. Thomas' articles are well-researched, informative, and written in a clear, concise style that keeps audiences hooked. His ability to craft compelling narratives while seamlessly incorporating relevant keywords has made him a valuable asset to the VORNews team.

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Cisco Systems Joins Microsoft, IBM In Vatican Pledge To Ensure Ethical Use And Development Of AI

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34 mins ago

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2024-04-24

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AP - VOR News Image

ROME  — Cisco Systems, a prominent technology company, has recently joined Microsoft and IBM in endorsing a pledge initiated by the Vatican. This pledge aims to guarantee the ethical development and utilization of artificial intelligence for the betterment of society.

The Vatican said that Chuck Robbins, the CEO of Cisco Systems, had signed the Rome Call document and privately met with Pope Francis.

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AP – VOR News Image

Cisco Systems Joins Microsoft, IBM In Vatican Pledge To Ensure Ethical Use And Development Of AI

The promise delineates fundamental principles for the ethical and conscientious utilization of AI. The statement underscores the importance of designing, utilizing, and overseeing AI systems in a manner that prioritizes and safeguards the dignity of all individuals without any form of discrimination and their surroundings. The document emphasizes the importance of transparency, inclusivity, responsibility, impartiality, and security in guiding all AI advancements.

cisco

AP – VOR News Image

Cisco Systems Joins Microsoft, IBM In Vatican Pledge To Ensure Ethical Use And Development Of AI

The document was revealed and officially endorsed during a Vatican meeting on February 28, 2020, shortly before Italy implemented strict measures due to the COVID-19 epidemic. The document’s signatories were Brad Smith from Microsoft and John Kelly III from IBM. Universities, United Nations agencies, private enterprises, and nongovernmental organizations have also agreed to participate.

Francis has advocated for an international agreement to guarantee AI’s ethical development and utilization, dedicating his yearly peace message to this subject.

Archbishop Vincenzo Paglia, the president of the Pontifical Academy for Life, who is spearheading the AI program, approved of Cisco’s involvement. He mentioned the IT company’s proficiency in “infrastructure, security, and safeguarding of AI data and systems.”

cisco

AP – VOR News Image

Cisco Systems Joins Microsoft, IBM In Vatican Pledge To Ensure Ethical Use And Development Of AI

The global spotlight has been directed towards artificial intelligence due to the remarkable progress made by state-of-the-art systems such as OpenAI’s ChatGPT. These systems have impressed users with their capacity to generate text, photographs, and melodies that closely resemble human creations. However, the advancement of technology has also sparked concerns regarding the potential hazards it presents to employment, privacy, copyright infringement, and even human existence.

SOURCE – (AP)

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FIFA Nears $1 Billion Deal with Apple TV Plus

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2 days ago

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2024-04-23

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FIFA Nears $1 Billion Deal with Apple TV Plus
FIFA is close to sealing a deal with Apple: CTN News Image

FIFA, soccer’s international governing body, wants to stage a World Cup-style event with 32 top club clubs from around the world. If talks between Apple and FIFA are successful, it might be shown on Apple TV Plus.

According to the New York Times, FIFA is close to sealing a deal with Apple for global rights to the event. According to the Times, an agreement might be revealed by the end of the month.

According to reports, the purchase could be worth $1 billion, significantly less than FIFA‘s expectation of $4 billion. It is unclear whether this club tournament will be shown solely on Apple TV Plus or with free-to-air rights.

VOR News

Nonetheless, given Apple’s interest in live sports for its streaming service — Apple TV Plus presently features Major League Soccer events as well as a monthly Major League Baseball doubleheader — one would expect Apple TV Plus to be the exclusive home for the Club World Cup.

The 32-team tournament is slated to begin in June 2025. The competition would include club teams from Africa (4 teams), Asia (4), Europe (12 teams), North America/Central/Caribbean (4), Oceania (1 team), and South America (6 teams).

FIFA has been attempting to launch a version of this competition for some years. The final big stab was scheduled to take place in China in 2021. COVID delayed and ultimately ended that iteration of the event.

VOR News

Supposedly, both broadcasters and sponsors have been hesitant to agree to FIFA’s asking fees. So, this could be the last chance for FIFA president Gianni Infantino to make this event a reality.

If this agreement is completed, it will be the first time FIFA has entered into a single global contract for viewing.

Soccer has proven to be a popular source of content for streaming services aiming to attract viewers (and subscribers). Peacock presently has the streaming rights for English Premier League fixtures. Paramount Plus presently holds the rights to the UEFA Champions League.

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iPhone 16 Design Details and New Features Revealed in Leak

Published

2 days ago

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2024-04-22

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iPhone 16 Design Details and New Features Revealed in Leak
iphone on display at Apple Store: Getty Images

(CTN News) – The design of the next iPhone 16 and iPhone 16 Pro has been revealed through mock leaks, prompting case makers to adjust accordingly.

Leaker Sonny Dickson shared an image on X that shows the iPhone 16 and iPhone 16 Pro Max in matching cases. Aside from the standard cutout in the cases’ bodies for the cameras, there is another weirdly placed cutout on their right flanks.

The Capture button, a supposed new feature of the iPhone 16s, allows users to focus and take images and videos without using on-screen controls in the Camera app.

The button is pressure-sensitive and requires a finger contract to function. As a result, cases cannot cover these buttons without rendering them unusable, thus the cutout.

The Capture button is expected to be located in the same location as the mmWave 5G antenna on existing devices. It’s likely that this cutout is solely for connectivity purposes, and that the reports concerning the Capture button are false.

iPhone 16 Rumors

iPhone 16 Rumors: File Image

 

Stay Updated on iPhone 16 Rumors

Furthermore, as commentators on Dickson’s article point out, the iPhone 16 lacks a visible flash, indicating that these cases are unlikely to be final products, even if they are otherwise accurate.

Another notable iPhone 16 difference evident in this dummy/case combo is the vertically placed cameras on the standard iPhone 16. This is likely to enable the phone to capture spatial video, similar to the Pro models, which can then be seen with an AR/VR headset like the Vision Pro.

Apple’s September launch window for iPhones is still a while off, but you can find all the rumors so far in our iPhone 16, iPhone 16 Pro, and iPhone 16 Pro Max hubs. And we will keep you updated until their expected announcement this fall.

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