Accounting

Cuts to jobs and facilities paid off for Meta

Its profits almost tripled in Q4.
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· less than 3 min read

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2022 was a rough year for Meta. Inflation and high interest rates dinged the company, and Apple made changes to its operating system that made it harder for brands to target customers, and rival TikTok kept on growing. Meta’s stock price fell more than60%.

But the company saw a dramatic turnaround of its fortunes in 2023. Its full-year net income rose 69% over 2022 to $39.1 billion. Its diluted earnings per share went from $8.59 to $14.87, a 73% YoY jump. Q4 2023 was especially good for Meta: Its net income more than tripled and its revenue rose 25%.

And for the first time, the company gave out cash dividends to investors. Technology analyst Ben Barringer described the move to CNBC as a “symbolic moment” that showed Meta viewed itself as a “mature, grown-up business.”

Meta’s success, though, required paring down. It reduced operating expenses in 2023 by laying off some 20,000 people, slashing its headcount by 22%. It spent $2.5 billion on “facilities consolidation,” or reducing its office footprint. The changes were part of a plan to make the company “leaner” so it would be better able to weather volatility over the next five to 10 years, CEO Mark Zuckerberg said.

Look for Meta to focus on generalized AI in the near future. “General intelligence will be the theme of our product work” as well as its research, Zuckerberg said during an earnings call, after speaking of a future where everyone who used its products would have access to “a world-class AI assistant.”

Metaverse continues to lose money: Zuckerberg’s been criticized for pouring money into Reality Labs, the division of Meta focused on virtual reality. Meta lost $16.1 billion on Reality Labs in 2023. The division earned $1.1 billion in revenue in Q4, due largely to holiday sales of its Quest 3 game, but this was dwarfed by $5.7 billion in expenses.

(Zuck’s also thinking that “smart glasses that have AI assistance built in” wi

News built for finance pros

CFO Brew helps finance pros navigate their roles with insights into risk management, compliance, and strategy through our newsletter, virtual events, and digital guides.