At least for the moment, it is possible that Meta's decline will be a thing of the past.
Meta, formerly Facebook, announced on Wednesday that its revenue in the first quarter increased 3 percent compared to a year ago, reaching $28,6 billion. The company's profits fell by 24 percent to $5.7 billion due in part to restructuring charges.
A growth in Meta users boosted the results. They exceeded Wall Street's expectations and Meta’s own guidance. The company reported a 4 percent increase in daily users of its flagship app, Facebook. This is a significant turnaround from its first ever drop in users in early 2022.
Mark Zuckerberg, Meta's chief executive, stated in a press release that "we had a great quarter and our community is growing." He said that Meta was "becoming efficient to build better products quicker and put ourselves in stronger position to deliver the long-term vision."
The performance comes after a turbulent year for Meta. It is trying to reinvent itself following declining revenues and what Mr. Zuckerberg called an overcrowded work force.
He is moving the company to the untested "immersive world" of the metaverse. Meta faces competition from TikTok which steals advertising dollars from social media companies and Apple which has made privacy changes to iOS to make Facebook's advertising technology unusable.
After years of rapid growth, these challenges have led to questions about Meta’s future and vulnerabilities.
In a conference call on Wednesday about financial results, Mr. Zuckerberg stated that he did not intend to abandon his pursuit of metaverse. It remained a goal for the long term.
He has, in an attempt to turn things around, embarked upon what he calls "a year of efficiency", reined spending, and reduced employee numbers by over 21,000 or approximately 30 percent. Meta's share price has risen by more than 12 per cent in after-hours trades. It is up 63 per cent since November, when the company announced its first round of layoffs.
Meta announced another 10,000 layoffs for March. The company announced on Wednesday it would incur approximately $1 billion in severance costs and personnel-related costs as a result of the layoffs.
In a call with investors, Mr. Zuckerberg stated that "our business was not performing as well as I hoped when we began this work last summer." He said that he "continued to believe that slowing the hiring and flattening our managerial structure" would improve Meta's speed and quality.
These actions have also harmed employee morale. The workers are wondering if they will be laid off. Mr. Zuckerberg said that he was trying to eliminate the "managers who manage managers" as a result of an overabundance of middle management due to overzealous hiring during the pandemic era.
As of March 31, the company reported 77,114 workers. This is down 1 percent compared to a year ago.
Meta still faces challenges despite the latest results. Costs in the company's first quarter increased by 10 percent compared to a year ago, reaching $21.4 billion. This outpaced revenue growth.
Meta, which has invested heavily for years, is trying to establish itself as the leader in this field. He told investors that A.I. Instagram and Facebook users can now be shown more relevant images and videos.
Zuckerberg stated that he expects the new technology "to touch literally every one of our products in the future". A.I.
Meta will continue to invest heavily in infrastructure and data centers that support the development of A.I. Similar to other large tech companies, Meta is making similar efforts.