What happened

Shares of Meta Platforms (META -0.93%) charged sharply higher Wednesday morning, climbing as much as 8.7%. By 1 p.m. ET, the stock was still up 6.8%.

It's been a brutal year for the social media titan, but the stock got a boost as the company announced plans to rein in costs with a substantial round of layoffs.

So what

Meta Platforms has announced plans to cut its workforce by more than 11,000 staff, or roughly 13% of its employees. CEO Mark Zuckerberg said in a missive to personnel that the company plans to cut workers at all levels of its business, noting that the recruiting and business teams would be hit the hardest. 

The Facebook parent also plans a commensurate reduction in office space, having staff share desks in some instances, while also extending an existing hiring freeze through early 2023.

"This is a sad moment, and there's no way around that," Zuckerberg wrote to employees, issuing a rare mea culpa for believing the elevated online activity that accompanied the pandemic-related lockdowns would endure. "I got this wrong and I take responsibility for that." 

Meta also announced a generous severance package, paying out a minimum of 16 weeks of pay, plus an additional two weeks for every year of service. The company also plans to cover healthcare costs for affected employees and their dependents for six months.

Now what

Rumors have swirled for weeks regarding the potential for layoffs and other steps Meta might take to mount a turnaround. Meta's stock has fallen 70% so far this year, following back-to-back quarters of year-over-year revenue declines.

The economic uncertainty and the ongoing bear market have pummeled Meta Platforms, but there are reasons to be optimistic. Meta closed out 2021 as the second-largest digital advertiser, controlling an estimated 24% of the worldwide ad market, second only to Alphabet's Google -- and that dominance is unlikely to change. The company's cost-cutting measures will help shore up the bottom line in advance of an economic recovery.

Furthermore, with a price-to-sales ratio of just 2 and a price-to-earnings ratio of 10, Meta Platforms stock is a steal for long-term investors.