APSocial media giant Meta which owns apps like Facebook, Instagram and WhatsApp on Thursday posted lower fourth quarter profit and revenue, with quarterly profit declining 55% as founder and CEO Mark Zuckerberg on Thursday said his management theme for 2023 is “year of efficiency” after 18 years of growth, while addressing analysts on a post-earnings call.
The company's net income was $4.65 billion, or $1.76 per share, in the final three months of 2022. That's down 55% from $10.29 billion, or $3.67 per share, a year earlier.
Meta reported that it had scooped up $32.17 billion in fourth-quarter revenue, down from $33.67 billion a year ago.
"Our community continues to grow and I'm pleased with the strong engagement across our apps. Facebook just reached the milestone of 2 billion daily actives," said Zuckerberg said in a statement.
Daily active users across all of Facebook’s apps neared reached 2.96 billion, up 5% from a year ago.
He said this growth was mainly driven by the progress that the company was making on its AI discovery engine and Reels.
Meta has been dealing with stiff competition from TikTok and has been suffering as a result of Apple's updated ad-tracking system in 2021.
It also said on Thursday that it has increased its share repurchase authorization by $40 billion. In 2022, Meta bought back about $28 billion in stock, according to the statement.
Last year, the company laid off extensively to cut costs. Its headcount was 86,482 as of December 31, 2022, an increase of 20% year-over-year.
"Our reported headcount includes a substantial majority of the approximately 11,000 employees impacted by the layoff we announced in November 2022, who will no longer be reflected in our headcount by the end of the first quarter of 2023," the company said on Thursday.
The costs of its layoffs and other restructuring totaled $4.2 billion.
"We closed last year with some difficult layoffs and restructuring some teams. And since then, we have taken some additional steps, like working with our infrastructure team on how to deliver our roadmap while spending less on CapEx," Zuckerberg said.
Meta's future
Zuckerberg, during the company’s earnings call, said 2023 will be the ‘year of efficiency’. He described the focus on efficiency as part of the natural evolution of the company, calling it a "phase change" for an organisation that once lived by the motto "move fast and break things."
"I want to discuss my management theme for 2023, which is the Year of Efficiency. We closed last year with some difficult layoffs and restructuring some teams. And when we did this, I said clearly that this was the beginning of our focus on efficiency and not the end," he said during the company's earnings call after the fourth quarter results.
During the earnings call, the CEO said Meta was working on flattening the organisation structure and removing some layers of middle management to make decisions faster as well as deploying AI tools to help its engineers be more productive.
This means that another set of layoffs in the future cannot be entirely ruled out as the social media giant moves towards a leaner and more "efficient" organisation structure.
Growing too fast
During the call Zuckerberg acknowledged that his company grew too fast too quickly.
"We just grew so quickly for like the first 18 years," he said. "It's very hard to really crank on efficiency while you're growing that quickly. I just think we're in a different environment now."
To tide over the raging macroeconomic headwinds and dwindling advertisement revenues, Meta announced it will cut $5 billion in costs, to about $89 billion from the earlier projected $94 billion.
The results come in the backdrop of Big Tech companies undertaking layoffs over the last few months.
The layoff wave has swept big tech companies such as Amazon, Microsoft, and Google parent Alphabet, among others. So far, 256 tech companies have laid off 82,769 employees in 2023, according to tracking site Layoffs.fyi.
The company's net income was $4.65 billion, or $1.76 per share, in the final three months of 2022. That's down 55% from $10.29 billion, or $3.67 per share, a year earlier.
This marks the third consecutive quarter of revenue decline for the tech giant, which laid off 11,000 workers, or about 13% of its workforce, in November.
Meta reported that it had scooped up $32.17 billion in fourth-quarter revenue, down from $33.67 billion a year ago.
"Our community continues to grow and I'm pleased with the strong engagement across our apps. Facebook just reached the milestone of 2 billion daily actives," said Zuckerberg said in a statement.
Daily active users across all of Facebook’s apps neared reached 2.96 billion, up 5% from a year ago.
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He said this growth was mainly driven by the progress that the company was making on its AI discovery engine and Reels.
Meta has been dealing with stiff competition from TikTok and has been suffering as a result of Apple's updated ad-tracking system in 2021.
It also said on Thursday that it has increased its share repurchase authorization by $40 billion. In 2022, Meta bought back about $28 billion in stock, according to the statement.
Last year, the company laid off extensively to cut costs. Its headcount was 86,482 as of December 31, 2022, an increase of 20% year-over-year.
"Our reported headcount includes a substantial majority of the approximately 11,000 employees impacted by the layoff we announced in November 2022, who will no longer be reflected in our headcount by the end of the first quarter of 2023," the company said on Thursday.
The costs of its layoffs and other restructuring totaled $4.2 billion.
"We closed last year with some difficult layoffs and restructuring some teams. And since then, we have taken some additional steps, like working with our infrastructure team on how to deliver our roadmap while spending less on CapEx," Zuckerberg said.
Meta's future
Zuckerberg, during the company’s earnings call, said 2023 will be the ‘year of efficiency’. He described the focus on efficiency as part of the natural evolution of the company, calling it a "phase change" for an organisation that once lived by the motto "move fast and break things."
"I want to discuss my management theme for 2023, which is the Year of Efficiency. We closed last year with some difficult layoffs and restructuring some teams. And when we did this, I said clearly that this was the beginning of our focus on efficiency and not the end," he said during the company's earnings call after the fourth quarter results.
During the earnings call, the CEO said Meta was working on flattening the organisation structure and removing some layers of middle management to make decisions faster as well as deploying AI tools to help its engineers be more productive.
This means that another set of layoffs in the future cannot be entirely ruled out as the social media giant moves towards a leaner and more "efficient" organisation structure.
Growing too fast
During the call Zuckerberg acknowledged that his company grew too fast too quickly.
"We just grew so quickly for like the first 18 years," he said. "It's very hard to really crank on efficiency while you're growing that quickly. I just think we're in a different environment now."
To tide over the raging macroeconomic headwinds and dwindling advertisement revenues, Meta announced it will cut $5 billion in costs, to about $89 billion from the earlier projected $94 billion.
The results come in the backdrop of Big Tech companies undertaking layoffs over the last few months.
The layoff wave has swept big tech companies such as Amazon, Microsoft, and Google parent Alphabet, among others. So far, 256 tech companies have laid off 82,769 employees in 2023, according to tracking site Layoffs.fyi.
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