People are not a priority for Meta Platforms, the Metaverse is!

Metaplatforms (WKN: A1JWVX) is struggling with the current market environment. Social networks like Facebook and Instagram thrive on digital advertising. Now that we are in a declining economic cycle, it is all the more difficult to maintain revenues at the level of previous years.

We saw it very clearly in the latest quarterly figures: Meta Platforms is currently on a contraction trajectory. However, at least part of the result is because the leadership around Mark Zuckerberg is investing so heavily in the Metaverse.

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The personal and the metaverse are our two relevant things today. Apparently only one thing has priority for top management, the other should even be cheated more. Here the details.

Meta Platforms: people are not a priority

At the moment, there are some interesting titles around meta-platforms. Top management is apparently considering massive layoffs within the group. Staff should cancel business trips and be prepared. The outlook for employees is not good, although savings have already been announced by the business community.

However, the following statement is of particular interest to me in this context: According to CEO Mark Zuckerberg, Meta Platforms will only invest in so-called priority areas. Most of the other teams will likely stay more or less where they are for the next year. Or even shrink.

Concretely, this means that the staff is not a big priority, which we can leave as is for the moment. But also that the Metaverse, which has a clear and high priority for Mark Zuckerberg, will continue to be massively served. And this despite the fact that the core business is currently weakening and that the operational recovery is also linked to these loss-making investments.

Patience… and a big bet

Meta Platforms and especially the management team around Mark Zuckerberg dares to bet high roller. They don’t just swear to investors to be patient. No, even in difficult times they continue to place a high volume of investment on a strategic question mark. After all, the Metaverse is not yet such a mature market that one can safely speak of a billion-dollar potential.

This still raises question marks. For example, if the management itself sees the integrity of its own social networks at risk and therefore invests accordingly in order to open up a new market. In general, social networks like Facebook, WhatsApp and Instagram remain good business. Nevertheless: The priorities remain confusing. Investors should at least be prepared for tough times. The staff anyway, they should have been warned.

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Vincent owns shares of Meta Platforms. The Motley Fool owns stock and recommends Meta Platforms.

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