New year, new Meta
Mark Zuckerberg’s leaner, meaner version of Meta has been a hit with investors, as the company’s shares outperform everything but Nvidia on the S&P 500 so far this year. That resurgence has added ~$220bn to Meta’s market cap so far, undoing some of the $600bn+ the tech giant lost in 2022.
In a recent internal update, the Meta chief warned that the company is planning about 10,000 further cutbacks and that 5,000 open roles would be scrapped. The company's first round of cuts last year apparently taught Zuck that “leaner is better”, with the CEO also announcing intentions to streamline and cancel low-priority and duplicative projects.
This frugal new outlook is a rather dramatic shift for Zuckerberg's company. Meta grew its headcount 144% in 4 years and has been spending billions on “Reality Labs”, the company’s metaverse project that hasn’t exactly been a hit with investors. Indeed, even Zuck may now be reconsidering whether people actually want to strap on their headsets and live in his virtual world, with the strategy switch-up including a renewed focus on AI — perhaps a response to the current hype around tools like ChatGPT.
With everything going on, it’s easy to lose sight of what’s still at the company's core: social media apps, which are doing just fine (especially if TikTok gets banned). Indeed, just after its 19th birthday, Facebook still counts a staggering 2 billion daily active users.