Meta Platforms Inc META shares popped Wednesday afternoon on reports the company plans to trim costs by at least 10% in the coming months.
What Happened: According to a Wall Street Journal report, Meta executives have mentioned cost-cutting and hiring freezes in response to slowing growth and increasing competition.
The report indicates that Meta has started to quietly push out a number of employees by reorganizing departments and offering limited windows to apply for other roles within the company, citing current and former managers familiar with the matter.
Meta is reportedly looking to trim its costs by at least 10% within the next few months, and a majority of the cost savings are expected to come from reduced employment.
See Also: After Google, Meta Also Suffers EU Antitrust Setback
Why It Matters: Douglas C. Lane & Associates’ Sarat Sethi owns Meta shares and said he plans to continue adding to his position at current levels.
“I think this is a good thing,” Sethi said Wednesday on CNBC’s “Fast Money Halftime Report.”
Investors have been concerned about the company’s metaverse spending, which helps to explain the stock’s move higher on the news. It’s also smart to cut costs as we enter a potential advertising slowdown, he said.
“It looks like the company is making the right moves here, cutting costs and focusing on operational expertise,” Sethi said.
“It’s been one of our worst performers, but I do believe there’s a lot of value there, and I’m still a holder and a buyer at these levels.”
META Price Action: Meta has a 52-week high of $199.45 and a 52-week low of $11.73.
The stock was up 1.44% at $148.19 Wednesday afternoon, according to Benzinga Pro.
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