Meta Platforms Inc CEO Mark Zuckerberg on Wednesday struck a new tone with investors: The social media giant would be leaner, more efficient and more decisive, with a big assist from artificial intelligence (AI).
The company’s shares gained more than 20 percent in late trading on fourth-quarter revenue that beat expectations. Zuckerberg, who has spent the past year promising a faraway future in a digital world called the metaverse, on Wednesday was more focused on immediate problems, such as sending users the most relevant videos at the right time, and finally making significant revenue from messaging products.
He called 2023 the “Year of Efficiency.”
Photo: Reuters
“We’re working on flattening our org structure and removing some layers of middle management to make decisions faster, as well as deploying AI tools to help our engineers be more productive,” Zuckerberg said on an earnings call with investors. “There’s going to be some more that we can do to improve our productivity, speed and cost structure.”
Zuckerberg said the company is using AI to improve the way it recommends content — a strategy for making the platform more attractive to users and advertisers alike.
Meta is still suffering from a slump in demand for digital ads, which make up the vast majority of its sales, especially from clients in finance and technology. However, the company also pointed to some industries, including health and travel, where businesses are spending more.
Fourth-quarter sales fell 4 percent to US$32.2 billion, the third straight period of declines. Even so, the total beat analysts’ estimates, and Meta projected revenue of US$26 billion to US$28.5 billion for the first quarter, in line with an average projection of US$27.3 billion. Analysts are predicting that Meta would return to growth following the current period.
Meta, whose shares have gained 27 percent so far this year, is on the rebound after the worst year for its stock in history. The company cut 11,000 jobs, or 13 percent of the workforce, in November in its first-ever major layoff.
Those cuts came during a quarter that was otherwise an improvement for the company. Facebook, Meta’s flagship social network, now has more than 2 billion daily users, up more than 70 million from a year earlier.
The company also boosted its stock-buyback authorization by US$40 billion, adding to the US$10.9 billion remaining from previous repurchase programs.
Zuckerberg has spent tens of billions of US dollars on an effort to build the metaverse — a digital world where people can work and play. Those efforts are still in their early stages, which means much of the investment is not leading to immediate returns.
Still, the Menlo Park, California-based company said this year’s expenses would be US$89 billion to US$95 billion — less than it previously forecast. That could help ameliorate investor concerns that the company is overspending on its virtual-reality ambitions.
Capital expenditure last quarter soared to US$32 billion, compared with US$5.54 billion a year earlier.
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