Meta stock soars 20% after Zuckerberg hints at more layoffs – AI Tech News

Meta CEO Mark Zuckerberg said the social media giant will make 2023 ‘the year of efficiency’ – and signaled more layoffs could be on the horizon as Wall Street reacted positively the announcement that the company would launch $40 billion in share buybacks.

Meta’s share jumped nearly 20% in premarket trading on Thursday, as Facebook’s parent company’s fourth-quarter earnings beat analysts’ estimates on Wednesday.

Zuckerberg said the company “may incur additional restructuring costs as we progress with our efficiency efforts,” with the company saying they could total $1 billion this year.

“We closed last year with some tough layoffs and when we did that I made it clear that was the start of our focus on efficiency and not the end,” Zuckerberg said. adding that other levels of middle management could be further reduced.

Meta said it spent about $3.7 billion last year to pay severance and terminate office leases.

In November, Meta laid off more than 11,000 employees, or 13% of the company’s overall workforce. Zuckerberg blamed aggressive hiring during the pandemic, when Meta’s business boomed because people were stuck at home, scrolling on their phones and computers, glued to social media.

But as the shutdowns ended and people started going out again, revenue growth began to falter.

Meta’s share price fell around 70% in the past year as the company struggled to smoothly transition from its traditional ad-driven social media business model to advancing the metaverse.

“Our management theme for 2023 is ‘the year of efficiency,’ and we are focused on becoming a stronger, more agile organization,” he said.

Quarterly revenue fell 4% year over year to $32.17 billion, beating the forecast of $31.55 billion. The company also reported earnings per share of $1.76 — missing estimate targets of $2.26 per share. Meta forecast its first-quarter revenue estimate to be between $26 billion and $28.5 billion, beating analysts’ estimates.

Meta ended 2022 with a 1% drop in revenue from 2021 – its first year-over-year decline.

Reality Labs, the virtual reality division of Meta responsible for developing Zuckerberg’s metaverse vision, reported an operating loss of $4.28 billion, beating analyst estimates of $4.36 billion.

The division generated revenue of $727 million in the fourth quarter, beating the forecast of $715.1 million. Nevertheless, Reality Labs continues to be a loser for the company. In 2022, the division’s operating loss was $13.72 billion.

Although revenue declined, Meta continued to add users on its social media apps. Facebook’s daily active users hit 2 billion for the first time, up 4% from a year earlier.

Facebook had 2.96 billion monthly active users at the end of the year. Meta’s monthly active users on what it calls its “family” of apps – Instagram, Facebook, WhatsApp and Messenger – were 3.74 billion as of December 31.

With pole wires