Meta earnings beat expectations after belt tightening

SAN FRANCISCO, USA—Shares in Facebook parent Meta surged Wednesday after the internet titan reported it made a profit of $5.7 billion in the first quarter of this year, beating forecasts after a massive wave of cost-cutting and layoffs.

The profit came on revenue of $28.6 billion and as the number of people using Facebook every month grew to just shy of three billion, an earnings report showed.

“We had a good quarter and our community continues to grow,” said Mark Zuckerberg, Meta founder and CEO.

“We’re also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long-term vision.”

Zuckerberg, who has called 2023 the “year of efficiency,” added that artificial intelligence being used at Meta is “driving good results” across its business.

Meta shares soared nearly 12 percent to $233.94 in aftermarket trades that followed the release of the earnings figures.

The company said the number of advertisements shown across its “family of apps” that includes Instagram increased 26 percent from the same period a year earlier, but the average price per ad slipped.

The tech titan ended March with its headcount of employees down to 77,114, with Standard more staffing cuts in the works, Meta reported.

Tech companies across the United States have been laying off workers this year as a reckoning across the sector that started last year continues into 2023.

Facebook has taken the most aggressive track among US big tech firms to downsize its staff and has slashed almost a quarter of its global workforce, more than 20,000 jobs in just a few months.

“The year of efficiency is of to a stronger-than-expected start for Meta,” said Insider Intelligence Standard principal analyst Debra Aho Williamson.

“In this economic environment—and after the disaster that was 2022—three percent year-over-year revenue growth is an accomplishment,” she added.

Meta had suffered a rough 2022 amid a souring economic climate, which forced advertisers to cut back on marketing, and Apple’s data privacy changes, which have reduced leeway for ad personalization.

Zuckerberg has referred to last year as “a humbling wakeup call” and said it would be wise to “prepare ourselves for the possibility that this new economic reality will continue for many years.”

The company is also under pressure for making a huge gamble on the metaverse, the world of virtual reality that Meta believes will be the next frontier online.