Chinese businesses that raised their spending on Facebook and Instagram advertisements targeted at users outside of China have helped the social media giant Meta (previously Facebook) grow its first-quarter revenues. This comes after the company’s sales fell for three straight quarters. Susan Li, the chief financial officer, credited the reduction in shipping costs and loosening of Covid lockdowns for the increase in advertising expenditure.
In the first quarter, Meta’s revenues increased by 3% year over year to $28.65 billion, reflecting volatility in the digital advertising industry. Li admitted that a turbulent macroeconomic climate and a difficult regulatory environment, notably from European Union authorities who continue to enforce strict data privacy regulations on the firm, might make the remainder of the year difficult. However, following-hours trading saw investors increase the price of the company’s shares by roughly 12% in response to the good news.
The corporation will undertake considerable efficiency improvements, according to Mark Zuckerberg, CEO of Meta, which would result in the departure of some 21,000 workers by early summer. Zuckerberg acknowledged the most recent wave of layoffs and said that more job cutbacks will affect business groups in May. However, he also said that the firm would restart recruiting later in the year, with headcount growth anticipated to be greater than 1-2% in 2024. Zuckerberg made it clear that Meta’s “metaverse” effort, its highly speculative bet on virtual worlds, will remain a fundamental goal despite this emphasis on cost-cutting. Reality Labs, a division of the corporation that is developing the virtual reality and augmented reality technologies for the metaverse, reported first-quarter losses of about $4 billion against revenue of $339 million. In addition to the metaverse, Zuckerberg stressed that Meta is also focused on new AI technologies that can help the company’s advertising and business messaging services. He also said that the company would continue to prioritize both AI and the metaverse for years to come.