Meta, the parent company of WhatsApp, Facebook, and Instagram reported revenue of $32 billion, a 4% reduction from the previous year, but on the brighter side, the numbers lay on the high end of analysts’ estimates
Meta Platforms lead the tech stock rebirth on Wall Street even after the parent company reported a plunge in revenue in the fourth quarter compared to the previous year. Meta CEO Mark Zuckerburg states that the upcoming year would be a year of efficiency for the company as the share soared, surpassing the expected sales predictions.
The gain the company received increased Zuckerberg’s net worth to $10.8 billion higher in a single day. The shares of the social media platform rose significantly by 25% into the green owing to the recent developments. Meta, the parent company of WhatsApp, Facebook, and Instagram reported revenue of $32 billion, a 4% reduction from the previous year, but on the brighter side, the numbers lay on the high end of analysts’ estimates.
The Federal Reserve’s decision to increase federal funds by 25 basis points aided the Nasdaq Composite to go higher and the Meta developments elevated it even further. The fourth quarter had been better for Meta which had a comparatively tougher year due to the hard global economic slowdown that caused several giants to cut their spending in general and increased competition from other apps.
The company’s profits, however, were less compared to the previous year as mentioned, citing the restructuring cost which came to around $4 billion along with the cancellation of multiple data centers. The net income of the fourth quarter dropped more than 5 percent, reaching $4.7 billion. Nasdaq Composite has fronted the U.S. standard recovery as other tech companies like Amazon, Alphabet, and Apple continue their charge growth in 2023.
The Federal Reserve stated that it would increase its standard interest rate by only a quarter of a point in order to bring inflation under control.
Meta CEO Mark Zuckerberg stated that the company would be focusing on improving its speed, cost structure, and productivity. “2022 was a challenging year. But I think we ended up having made good progress on our main priorities and setting ourselves up to deliver better results this year, as long as we keep pushing on efficiency,” stated Zuckerberg.
The Continuing Saga of Layoffs
The largest tech companies in the world are presently struggling in a slowing global economy and the measures that are taken to cope with the same have seen a reduction in the revenues of the companies. Companies such as Google, Microsoft, Wipro, and Twitter chose to lay off employees in large numbers to be stable. The tech industry in the present situation could be seen as highly unpredictable and unstable.
Meta has also announced its decision to have another round of layoffs and improve the decision-making process by removing some middle management positions. This time the CEO mentions that the growing number of employees could affect the efficiency of the organization and thereby removing some layers of middle management could improve the flow of decision-making. In November 2022, Meta announced its decision to lay off around 11,000 employees, roughly firing around 13 percent of its workforce.
Companies like Google, Amazon, and Microsoft sacked a large number of their employees globally last month. Most of the companies stated that the over-hiring of employees during the pandemic backfired during the post-pandemic economic slump. In the US, the layoffs in January hit a two-year high amidst the threats of an impending recession. The layoffs in January had impacted more than 100,000 employees globally which is five times more than the employee sacking that happened in the whole of 2022.