Meta Platforms Inc., formerly known as Facebook, has experienced its biggest surge in almost a decade after CEO Mark Zuckerberg unveiled a new vision for the social media giant. Zuckerberg’s plans include making the company more efficient, decisive, and profitable, signaling an end to a tumultuous period for the firm.
In a call with investors on Wednesday, Zuckerberg was more focused on immediate problems than his far-off vision of the metaverse. He emphasized the need to send users the most relevant videos at the right time, and to generate significant revenue from messaging products. He called 2023 the “Year of Efficiency.”
“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. “There’s going to be some more that we can do to improve our productivity, speed and cost structure.”
Meta’s stock surge, which added more than 10% to the Nasdaq 100’s climb on Thursday, has made it one of the few tech companies to have a positive outlook, despite a decline in advertiser demand and changes in privacy rules. The company has taken several measures to counter the slump, including a major layoff of 11,000 jobs, or 13% of the workforce, in November.
Zuckerberg also revealed that 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’s sales mainly come from digital ads, particularly from finance and technology clients. Despite a 4% decline in fourth-quarter sales to $32.2 billion, the company beat analysts’ estimates and projected revenue of $26 billion to $28.5 billion for the first quarter.
Meta’s job cuts were part of a restructuring plan during a quarter that was otherwise an improvement for the company. Facebook, Meta’s flagship social network, now has over 2 billion daily users, up from more than 70 million a year ago.
Zuckerberg has also spent billions on building the metaverse, a digital world where people can work and play. While these efforts are in their early stages, the company has predicted expenses of $89 billion to $95 billion in 2023, less than Meta’s previous forecast. This should help ease investor concerns that the company is overspending on its virtual-reality ambitions.
Capital expenditures soared to $9.22 billion in the recent quarter, compared to $5.54 billion in the fourth quarter of 2021. By focusing on improving efficiency, cutting jobs, and using AI, Meta is making strides towards making its operations more effective, and its future looks bright.
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