#SocialStocks: Shares Responds as Meta Axes 13% of Workforce

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Advertisers turn up the heat on Twitter, TikTok restructures U.S. division and other notable stories from this week

Welcome to “#SocialStocks,” The Fly’s weekly recap of Wall Street’s reactions to social media stock news.


Mark Zuckerberg said in a message to Meta Platforms’ (META) employees: “Today I’m sharing some of the most difficult changes we’ve made in Meta’s history. I’ve decided to reduce the size of our team by about 13% and let more than 11,000 of our talented employees go. We are also taking a number of additional steps to become a leaner and more efficient company by cutting discretionary spending and extending our hiring freeze through Q1. I want to take accountability for these decisions and for how we got here. I know this is tough for everyone, and I’m especially sorry to those impacted. At the start of Covid, the world rapidly moved online and the surge of e-commerce led to outsized revenue growth. Many people predicted this would be a permanent acceleration that would continue even after the pandemic ended. I did too, so I made the decision to significantly increase our investments. Unfortunately, this did not play out the way I expected. Not only has online commerce returned to prior trends, but the macroeconomic downturn, increased competition, and ads signal loss have caused our revenue to be much lower than I’d expected. I got this wrong, and I take responsibility for that… Everyone will get an email soon letting you know what this layoff means for you. After that, every affected employee will have the opportunity to speak with someone to get their questions answered and join information sessions. We will pay 16 weeks of base pay plus two additional weeks for every year of service, with no cap. We’ll cover the cost of healthcare for people and their families for six months… While we’re making reductions in every organization across both Family of Apps and Reality Labs, some teams will be affected more than others. Recruiting will be disproportionately affected since we’re planning to hire fewer people next year. We’re also restructuring our business teams more substantially. This is not a reflection of the great work these groups have done, but what we need going forward.” Zuckerberg also noted revenue outlook was lower than expected at the beginning of the year. However, Meta Platforms backed both its Q4 revenue outlook and FY22 expense guidance. The company did lower its expense outlook for FY23 though. Meta said: “We have continued to refine our 2023 expense budget and now expect 2023 total expenses to be in the range of $94-100 billion, lowered from $96-101 billion previously. This includes the previously disclosed $2 billion in estimated charges related to consolidating our office facilities footprint. The updated range reflects our plan to add fewer employees in 2023 than we previously expected as we are significantly slowing our hiring trajectory through the beginning of 2023. We continue to anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year. In addition, we are updating our 2023 capital expenditures outlook to be in the range of $34-37 billion, narrowed from $34-39 billion.” Shares were up 5% in pre-market trading today.

Baird analyst Colin Sebastian said there may be investor concerns that Meta Platforms’ 13% reduction in headcount is not enough. While a layoff was broadly expected, the news represents a “significant shift in strategy for a company that prided itself on hiring expensive data scientists, large trust and safety teams, and an increasingly geographically-diverse workforce,” Sebastian told investors in a research note. He says the changes were mostly included in Meta’s recent expense outlook and represent a “right-sizing” from the significant growth in overheard from before and during the pandemic. Sebastian maintained an Outperform rating on Meta with a $150 price target.


Twitter (TWTR) usage is at an all-time high, Elon Musk said via the platform on Monday night.

Twitter has told advertisers the service added more than 15M mDAUs since the end of Q2, “crossing the quarter billion mark,” The Verge’s Alex Heath wrote. “Twitter’s largest market, the U.S., is growing even more quickly,” according to an internal FAQ obtained by The Verge that was shared with Twitter’s sales team on Monday to use in conversations with advertisers.

Elon Musk officially owns Twitter – and now the hand-wringing about his ability to oversee the rest of his empire has begun again. Of all the concerns around Tesla (TSLA), however, Musk’s ability to manage his time is probably furthest down the list, Al Root wrote in this week’s edition of Barron’s. Finding a way to cut costs while generating new revenue from the largest tech leveraged buyout ever is a challenge that will test his problem-solving skills and pull his attention away from Tesla, SpaceX, The Boring Co., and Neuralink, the four other companies he controls, the author notes. Damage to Tesla’s brand from the Twitter acquisition might also be a problem, Root writes.


Elon Musk sold almost $4B in Tesla shares after buying Twitter for $44B, according to regulatory filings. Musk sold 19.5M shares in Tesla in the November 4-8 period, according to the filings.

Musk fired over 90% of Twitter’s 200+ staff in India over the weekend, including roughly 70% of the product and engineering teams, Bloomberg’s Sankalp Phartiyal reported. The cuts left Twitter with just about a dozen staff in India, people familiar with the matter say.

Twitter, after laying off roughly half the company on Friday, is now reaching out to dozens of employees who lost their jobs and asking them to return, Bloomberg’s Kurt Wagner and Edward Ludlow reported. Some of those who are being asked to return were laid off by mistake, according to two people familiar with the moves. Others were let go before management realized that their work and experience may be necessary to build the new features Musk envisions, the people said.

Twitter plans to shut down newsletter platform Revue by the end of 2022, Platformer’s Casey Newton reported. Revue was acquired by Twitter in January 2021. In addition, Twitter plans to pause its new Notes product, which allowed long-form writing on the platform, and a proposed crypto wallet.


Twitter has filed registration paperwork to enable the company to process payments as Elon Musk looks to transform the social media platform, the New York Times’ Kate Conger reported, citing a filing with FinCEN. Musk has been seeking ways to generate additional revenue for Twitter and businesses that conduct money transfers, exchange currency or cash checks are required to register with FinCEN.

Twitter product executive Esther Crawford says the platform will have three different types of accounts amid the network’s new verification scheme following the acquisition by Elon Musk, CNBC’s Lora Kolodny reported. Some originally verified accounts will soon receive an “official” label, said Crawford, while users who pay $7.99 per month for Twitter Blue will get a blue check mark.


Mondelez (MDLZ) CEO Dirk Van de Put told Reuters in an interview that the company removed its ads from Twitter after Musk acquired the social media platform. “What we’ve seen recently since the change on Twitter has been announced, is the amount of hate speech increase significantly,” Van de Put said. “We felt there is a risk our advertising would appear next to the wrong messages.” “As a consequence, we have decided to take a pause and a break until that risk is as low as possible,” he added. An Allianz (AZSEY) spokesperson said that the German insurer and asset manager intends to halt its paid advertising on Twitter for the time being, Reuters’ Tom Sims reported. The move follows similar actions by companies in the wake of Elon Musk’s acquisition of the social media giant, the author noted. General Mills (GIS),  Pfizer (PFE), and Volkswagen’s (VWAGY) Audi (AUDVF) are among a growing list of companies that have temporarily frozen their Twitter advertising, The Wall Street Journal’s Suzanne Vranica and Patience Haggin reported, citing people familiar with the matter. Some advertisers have concerns that Musk could curtail content moderation, which they worry would result in a boost of objectionable content, the authors say. Other companies are concerned about the uncertainty at the company as top executives leave and Musk weighs a number of changes, the authors noted. Elon Musk said via Twitter over the weekend, “Twitter has had a massive drop in revenue, due to activist groups pressuring advertisers, even though nothing has changed with content moderation and we did everything we could to appease the activists. Extremely messed up! They’re trying to destroy free speech in America.”

An economic slowdown combined with a slowing digital advertising environment have forced short-form mobile video app TikTok to restructure its U.S. division, reported Patrick McGee and Cristina Criddle for the Financial Times. Amid “sweeping leadership changes” to the company’s U.S. business, North America general manager Sandie Hawkins was transferred and placed in charge of TikTok Shop, the company’s ecommerce channel, added the FT story.

Musk previously promised advertisers he would prevent Twitter from turning into a “free-for-all” and now advertisers are demanding details on how he plans to uphold this commitment, Shella Dang of Reuters reported. A media buyer at one major ad agency said the agency will be meeting with Musk this week to ask how he plans to clamp down on misinformation on the platform. Other topics in question include Musk’s plan to raise the cost of Twitter’s subscription service as well as his plan to serve “half as many ads.” Many also have questions on who will serve as advertisers’ point of contact after several senior executives left the company since he took over.


Verint (VRNT) and Zoom Video (ZM) announced an expanded partnership to help organizations deliver exceptional customer experiences across the enterprise through the additional integration of the Verint Customer Engagement Platform with Zoom Contact Center. Verint and Zoom have a shared vision for the future of customer experience by helping organizations close the Engagement Capacity Gap, the chasm between what organizations know they need to do to meet rising customer expectations and the resources they have to do it. Verint Data Management solutions are integrated with Zoom Phone and Zoom Meetings to help businesses capture, archive, analyze, ensure compliance, and retrieve interactions. The expanded partnership complements this platform-to-platform approach by connecting the Verint Platform to Zoom’s rich set of Contact Center APIs to deliver workforce engagement.

In an interview on CNBC’s Mad Money, Kelly Steckelberg said the company is seeing continued growth with Zoom IQ and requests to extend it. “The future of work has changed and we’re the company that has helped define that,” she added. Zoom will continue to be “the platform of choice – customers love us.” She noted that 10% of Zoom’s customers account for approximately 50% of its ARR.

Joseph Chong, Head of Product, Solutions, and Industry Marketing for Zoom Video blogged, in part: “We’re taking another step forward to help users seamlessly access the tools they need directly in the easy-to-use Zoom app. With Zoom Mail and Calendar Clients (beta), users will get even more communication and collaboration capabilities in Zoom One and reduce the “toggle tax.” Users will be able to work more efficiently, quickly access their communications, and easily schedule and join meetings-all from Zoom! The Zoom Mail and Calendar Services (beta) are targeted at small-to medium-business customers who particularly value email privacy. The Zoom Mail Service will provide end-to-end-encrypted email when messages are sent directly between active Zoom Mail Service users, and the Zoom Calendar Service will include an appointment booking feature, an easy way for participants to select an available time to meet on Zoom. For more information on Zoom Mail and Calendar, read our announcement blog…We understand the need for connection and simplified communication in a hybrid work world, and one thing we have learned is that people miss spontaneous conversations and collaboration when they worked side-by-side. To help make those connections easier and bridge the gap between workers in different locations, we’re introducing a human-centered approach to virtual interaction – Zoom Spots…Coming in early 2023, Zoom Spots is Zoom’s virtual coworking space….”

Cvent (CVT) and Zoom Video announced that the two organizations would team up to power hybrid events. Organizations that are already working with the Cvent platform for in-person events will soon be able to integrate with Zoom Events to deliver an engaging and impactful end-to-end hybrid experience. This combined solution can be seen firsthand at Zoomtopia, an event powered by both Zoom Events and Cvent technologies. Organizations may leverage the same capabilities used at Zoomtopia through Cvent’s App – soon available in the Zoom App Marketplace – that supports Zoom Meetings, Zoom Webinars, and Zoom Events

Zscaler (ZS) announced new integrations with Zoom that connect the Zscaler Digital Experience, ZDX, monitoring service with Zoom’s Quality of Service Subscription, QSS, offering. The integrated solution gives enterprises’ IT and helpdesk teams near real-time quality performance metrics and analytics for all remote office employees. “The number of user-reported quality issues has increased as more hybrid workers rely on Zoom to stay connected and productive. This has put additional strain on Operations Teams including NetworkOps, ITOps, and Service Desk teams, who are expected to respond in real-time,” said Dhawal Sharma, Vice President and General Manager at Zscaler. “The new integrations with Zoom augment our existing integrations with Zoom APIs to provide IT and helpdesk teams with granular and real-time insights based on device, network, and application performance that quickly expose the root cause of user experience and reduces Mean Time to Resolution for user-reported issues.”

AMC Theatres (AMC) and Zoom announced a partnership that will turn some AMC locations throughout the United States into Zoom Rooms. AMC and Zoom currently anticipate launching Zoom Rooms at AMC in up to 17 major U.S. markets sometime in 2023. Upon launch, Zoom Rooms at AMC users will be able to easily book online, and in so doing can select their preferred theatres and meeting time. They will receive a three-hour block of time to virtually host their event across multiple markets at the selected theatres. AMC and Zoom will provide the necessary equipment for a fully functional Zoom Rooms experience, in the comfort of multiple movie theatres in multiple cities simultaneously. Typical auditorium sizes are expected to range between 75 and 150 seats, depending upon the theatre.

Originally Posted November 9, 2022 – #SocialStocks: Shares responds as Meta axes 13% of workforce

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