With the latest cuts, Meta expects expenses in 2023 to come in between $86 billion and $92 billion, lower than the $89 billion to $95 billion forecast previously. Meta has teased AI-powered “creative aids” that can generate images, videos and text but has yet to offer any such products on its apps, even as peers have launched dueling generative AI chatbots and productivity tools in recent months. In his memo, Zuckerberg made scant mention of virtual reality and instead emphasized the company’s focus on AI, saying Meta’s single largest investment was in “advancing AI and building it into every one of our products.” “Virtual reality is an expensive business to be in, so while (Meta) maps out a path through an uncertain landscape, it needs to find efficiencies elsewhere,” she added. The latest downsizing indicates “how desperate the company is to get costs under control as its revenues have fallen amid declining marketing budgets,” said Hargreaves Lansdown analyst Susannah Streeter. The stock received another boost in February when Zuckerberg dubbed 2023 the “Year of Efficiency,” with new cost controls and a $40-billion share buyback. ![]() Wall Street has been rewarding Meta steadily since its November restructuring, after its share price fell more than 70% earlier in 2022. ![]() The company also has struggled with Apple-led privacy changes and competition for young users from short video app TikTok.Īt the same time, Meta has been pouring billions of dollars into its metaverse-oriented Reality Labs unit, which lost $13.7 billion in 2022, and investing in infrastructure to support its artificial intelligence usage. Investors have grown wary of Zuckerberg’s prolific spending as revenue growth from Meta’s main businesses petered out amid high inflation and a digital ads pullback from the pandemic e-commerce boom. Both changes were initially reported by the Wall Street Journal. It also disbanded its skunkworks New Product Experimentation team and reassigned leader Ime Archibong to work on product for Messenger, according to an internal memo seen by Reuters. On Friday, Meta said it was exploring “strategic alternatives” for Kustomer, a customer service company it acquired last year. The first of the latest wave of cuts appeared to have started even before Zuckerberg’s announcement. Meta also will remove multiple layers of management and ask many managers to become individual contributors, while eliminating non-engineering roles, automating more functions and at least partially reversing a commitment to “remote-first” work that Zuckerberg made amid COVID-19 pandemic lockdowns. Restructurings in the tech group would be announced in late April and cuts to business groups would come in May. Zuckerberg said he planned to further reduce the size of the recruiting team, which was already hard-hit in the fall layoffs. “I think we should prepare ourselves for the possibility that this new economic reality will continue for many years.” But last year was a humbling wake-up call,” Zuckerberg wrote. ![]() “For most of our history, we saw rapid revenue growth year after year and had the resources to invest in many new products. ![]() In a message to staff on Tuesday, Zuckerberg said most of the new cuts would be announced in the next two months, though in some cases they would continue through the end of the year. On top of inflation woes, the company is also facing down unique threats to its core digital ads business while spending handsomely on Chief Executive Mark Zuckerberg’s plans to build a futuristic metaverse. Meta’s purge of employees has been one of the sector’s most pronounced.
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