Meta CEO Mark Zuckerberg said the social-media giant will make 2023 the “yr of efficiency” — and signaled that more layoffs could possibly be within the offing as Wall Street reacted positively to news that the corporate would initiate $40 billion price of share buybacks.
Share of Meta surged by nearly 20% in pre-market trading on Thursday as Facebook’s parent company’s fourth quarter earnings beat analysts’ estimates on Wednesday.
Zuckerberg said that the corporate “may incur additional restructuring charges as we progress further in our efficiency efforts,” with the corporate saying they may total $1 billion this yr.
“We closed last yr with some difficult layoffs and after we did this, I said clearly that this was the start of our concentrate on efficiency and never the top,” Zuckerberg said. adding that further layers of middle management could still be trimmed.
Meta said it spent around $3.7 billion last yr in paying out severance in addition to terminating office leases.
In November, Meta laid off greater than 11,000 employees — or 13% of the corporate’s overall workforce. Zuckerberg blamed aggressive hiring in the course of the pandemic, when Meta’s business boomed because people were stuck at home, scrolling on their phones and computers, glued to social media.
But because the lockdowns ended and other people began going outside again, revenue growth began to falter.
Meta’s stock price slid by some 70% last yr as the corporate has struggled to easily pivot from its traditional, bread-and-butter business model of ad-driven social media to advancing the metaverse.
“Our management theme for 2023 is the ‘yr of efficiency’, and we’re focused on becoming a stronger and more nimble organization,” he said.
Quarterly revenue fell 4% year-over-year to $32.17 billion — besting forecasts for $31.55 billion. The corporate also reported earnings per share of $1.76 — missing estimate targets of $2.26 a share. Meta projected that its first quarter revenue estimates would range somewhere between $26 billion and $28.5 billion — surpassing analyst estimates.
Meta ended 2022 with a 1% revenue decline from 2021 — its first year-over-year drop.
Reality Labs, the virtual reality division of Meta liable for developing Zuckerberg’s metaverse vision, reported an operating lack of $4.28 billion — beating analyst estimates of $4.36 billion.
The division generated revenue of $727 million within the fourth quarter — surpassing forecasts of $715.1 million. Nonetheless, Reality Labs continues to be a money-loser for the corporate. In 2022, the division’s operating loss totaled $13.72 billion.
Though revenue declined, Meta continued so as to add users on its social media apps. Facebook’s each day energetic users hit 2 billion for the primary time — up 4% from a yr earlier.
Facebook had 2.96 billion monthly energetic users at the top of the yr. Meta’s monthly energetic users on what it calls its “family” of apps — Instagram, Facebook, WhatsApp and Messenger — were 3.74 billion as of Dec. 31.
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