---
title: "Meta shares soar as Zuckerberg ushers in ‘year of efficiency’"
description: "Meta Platforms CEO Mark Zuckerberg struck a new tone with investors on Wednesday: The social media giant will be leaner, more efficient and more decisive, with a big focus on artificial intelligence."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Business Maverick"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2023-02-02-meta-shares-soar-as-zuckerberg-ushers-in-year-of-efficiency/"
published: "2023-02-02T06:01:38"
lang: "en-ZA"
word_count: 560
---

# Meta shares soar as Zuckerberg ushers in ‘year of efficiency’

> Meta Platforms CEO Mark Zuckerberg struck a new tone with investors on Wednesday: The social media giant will be leaner, more efficient and more decisive, with a big focus on artificial intelligence.

By Bloomberg · Published 2 February 2023, 08:01 SAST

## Key points
- Despite the global economic slump, Facebook shares gained more than 20% in late trading due to fourth-quarter revenue that exceeded expectations. CEO Mark Zuckerberg has promised a digital world called the metaverse but is now focused on immediate problems such as providing users with relevant content. The company is using AI to improve its recommendation system and Meta is seeing increased spending from health and travel industries. Although sales fell 4%, the total was higher than analysts' estimates. Meanwhile, rival Snapchat gave a less optimistic outlook and its shares dropped 10%. Facebook has cut 11,000 jobs, but 2 billion daily users are still using the platform. Capital expenditure soared to $32-billion in the quarter and expenses for 2023 are forecast to be between $89-billion and $95-billion – lower than previously expected.
- Facebook shares rose 20% after beating expectations for fourth-quarter revenue.
- CEO Mark Zuckerberg promised a "year of efficiency" and said the company is using AI to improve content recommendations.
- Despite a slump in demand for digital ads, some industries such as health and travel are spending more.
- The company also boosted its stock-buyback authorisation by $40-billion and capital expenditures soared to $32-billion.

## Content

The company’s shares gained more than 20% 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”.

“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. But the company also pointed to some industries, including health and travel, where businesses are spending more.

Fourth-quarter sales fell 4% to $32.2-billion, the third consecutive period of declines. Even so, the total beat analysts’ estimates, and Meta projected revenue of $26-billion to $28.5-billion for the first quarter, in line with an average projection of $27.3-billion. Analysts are predicting that Meta will return to growth following the current period.

Snap, the parent of rival social-media app Snapchat, gave a less upbeat outlook on Tuesday, sending its shares down 10%. Snap said it expected sales to decline in the current period, with CEO Evan Spiegel remarking that the ad slump appears to be bottoming out. “Advertising demand hasn’t really improved, but it hasn’t gotten significantly worse either,” Spiegel said on a conference call.

Meta, whose shares have gained 27% so far this year, is on the rebound after the worst year for its stock in history. The company faced a decline in advertiser demand due to weakness in the broader economy as well as a change in privacy rules on Apple’s iPhone, which made it harder for Meta to offer targeted ads. Meta cut 11,000 jobs, or 13% 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 ago.

The company also boosted its stock-buyback authorisation by $40-billion, adding to the $10.9-billion remaining from previous repurchase programmes. In the fourth quarter, Meta recorded restructuring charges of $4.2-billion related to its job cuts.

Zuckerberg has spent tens of billions of 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 2023 expenses will be $89-billion to $95-billion – less than Meta previously forecast. That could help ameliorate investor concerns that the company is overspending on its virtual-reality ambitions.

Capital [expenditures](https://s21.q4cdn.com/399680738/files/doc_financials/2022/q4/Earnings-Presentation-Q4-2022.pdf) in the recent quarter soared to $32-billion. In the fourth quarter of 2021, by contrast, capital spending was $5.54-billion. **BM/DM**