Facebook parent Meta reveals 55% profit drop after mass layoffs Business News

Profit at Facebook’s parent company fell 55% in the final quarter of 2022 — the result of a $4.2 billion restructuring charge that included the cost of thousands of layoffs.

Yuan Platforms including WhatsApp and Instagram said their net profit indicator slipped to $4.65 billion in the October-December period.

That’s down from a figure of more than $10 billion for the same period in 2021.

However, its quarterly revenue, ad revenue, and Facebook’s daily active user metrics all beat market expectations.

The total number of users on its platforms grew 4%, reaching 2 billion on Facebook alone.

The stock was down about 60% from its September 2021 close peak, but was up more than 12% in after-hours trading.

That could be explained by Meta’s forecast for first-quarter revenue, analysts said.

They were higher than Wall Street expectations, pointing to a rebound in digital ad demand after months of weak sales.

FILE PHOTO: Facebook Chairman and CEO Mark Zuckerberg attends the annual Munich Security Conference in Germany, February 15, 2020.REUTERS/Andreas Gebert/File Photo
Mark Zuckerberg says 2023 will be Meta’s ‘year of efficiency’

Companies in the tech space plummeted in value last year as high inflation and a broader economic slowdown strained consumer and business spending.

Along with competitors, Meta has aggressively cut costs to improve profitability.

it reveals 11,000 layoffs November came after pressure from investors following two straight quarters of revenue declines.

These costs are booked in the final quarter of 2022, ultimately leading to a decline in profits.

Meta said on Wednesday it expects to collect another $1 billion in fees related to its “efficiency” program during 2023.

Greater competition from the likes of TikTok has also eaten into its space.

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The Metaverse Race: The Struggle to Shape the Future of the Internet

But Meta founder and CEO Mark Zuckerberg is sticking to one of his big bets — pledging to keep investing in its virtual and augmented reality unit, Reality Labs, despite shareholder jitters over its prospects metaverse app.

In the three months through December alone, Reality Labs posted an operating loss of more than $4 billion, the statement of results showed. The figure for the whole of 2022 is more than $13.7 billion.

Zuckerberg said of the performance: “Our community continues to grow, and I’m pleased with the strong engagement on our app.

“Facebook just hit the 2 billion daily actives milestone.

“The progress we’ve made on our AI discovery engine and Reels is a major driver of this.

“In addition to this, our management theme for 2023 is ‘Year of Efficiency’ and we are committed to becoming a stronger and more agile organisation.”

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