JAKARTA - Meta CEO Mark Zuckerberg during his fourth-quarter (Q4) 2022 investor earnings call, said he wanted to make this year a year's year of efficiency.
"Our management theme for 2023 is 'Year of Efficiency' and we focus on becoming a stronger and more agile organization," Zuckerberg said.
"I just think we've entered a bit of a phase change for the company," he added. He also noted, the number of employees has continued to rise for nearly two decades, making it very difficult to really increase efficiency as they grow that fast.
Now, after laying off about 11,000 employees globally and stopping most of the signings, Zuckerberg will focus on increasing efficiency and how to make quick decisions. That means Zuckerberg will level the organizational structure and remove some levels of intermediate management.
Given the decline in Meta's share price by 64 percent in 2022, Wall Street is in support of the report, leaving shares up nearly 20 percent, extending the rally that began late last year.
Based on price fixing after working hours, Meta has been trading at the highest level since July. However, growth is not what excites investors.
Meta reports better revenue than expected in Q4, but sales are still down 4 percent from the previous year, marking a third quarterly decline in a row. The estimated range for the first quarter showed year-on-year (YoY) revenue could increase, but could also fall again.
In contrast, Zuckerberg's commitment to cost cuts and efficiency marks an important increase in profitability for Meta, known as a growth engine before last year's slump.
The company took a one-time fee of $4.2 billion in connection with layoff severance pay, cancellation of several building rentals, and the withdrawal of an expensive data center project.
It also hints that more layoffs can happen again. "We may be charged additional restructuring costs as we progress in our efficiency efforts," Zuckerberg said.
In addition, Meta also lowered its forecast for total expenditure in 2023 to be in the range of 89 billion US dollars to 95 billion US dollars, down from the previous outlook of 94 billion US dollars to 100 billion US dollars.
Meta's core business in broadcasting ads remains challenged, with overall revenue down one percent in 2022 compared to 2021. But Zuckerberg put in an optimistic tone, expressing comments about the company lagging behind the progress he saw internally in initiatives such as Reels' performance.
For all the catastrophe and confusion about the slow decay of Facebook itself, these numbers tell a different story, such as daily users reaching two billion which was surprising in Q4 for the first time.
According to The Verge, Friday, February 3, Zuckerberg said Meta would be more proactive in cutting projects that were not running or may no longer important and would emphasize removing levels of intermediate management from making decisions more quickly.
The company is also reducing spending as it builds a new data center intended to be more efficient while continuing to support the company's various artificial intelligence technologies.
Capital expenditures are now claimed to be in the range of 30 billion US dollars to 33 billion US dollars for 2023, not 34 billion US dollars to 37 billion US dollars.
Even so, at this time this does not apply to its metaverse efforts, which are still as expensive as before. Reality Labs, a division of Meta that builds Quest headsets and upcoming AR glasses, reported an operating loss of $13.72 billion in 2022. The figure, amazingly expected to increase this year.
Since Facebook changed its name to Meta in the fall of 2021, investors are increasingly concerned that Zuckerberg is spending his metaverse dream of reckless and little neglect to it. However, with this new efficiency boost, he may just qualify.
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