Mark Zuckerberg says Meta will 'preserve things lean,' going big in AI with a lid on hiring

Meta founder and CEO Mark Zuckerberg speaks throughout the Meta Connect occasion at Meta headquarters in Menlo Park, California, on Sept. 27, 2023.

Josh Edelson | AFP | Getty Images

Mark Zuckerberg is so happy with his “12 months of effectivity” that he is extending it indefinitely.

On Thursday’s earnings name, after Meta reported fourth-quarter financials that sailed previous analysts’ estimates, Zuckerberg mentioned he needs to “preserve things lean” and has no plans to speed up hiring.

Headcount, which peaked properly above 86,000 in 2022, shrank 22% final 12 months to 67,317, as Meta instituted mass value cuts to appease an investor base that had misplaced religion in the corporate’s skill to regulate to altering market circumstances. At the time, Meta was going through a powerful digital advert market and the lingering results of Apple’s 2021 iOS replace.

Exactly a 12 months in the past, Zuckerberg advised analysts on an earnings name that administration’s theme for 2023 could be the “year of efficiency,” and that Meta would change into a “stronger and extra nimble group.”

Wall Street has rewarded him ever since. The inventory almost tripled in worth final 12 months, making it the second-best performer in the S&P 500, behind solely Nvidia. It reached a report final month, and the persevering with rally has pushed Meta’s market cap properly previous $1 trillion.

On Thursday, Meta reported fourth-quarter gross sales progress of 25%, the quickest price of growth since mid-2021, to $40.1 billion. Net revenue soared a whopping 201% to $14 billion, and the corporate’s working margin greater than doubled to 41%. The inventory jumped 15% in prolonged buying and selling.

Add all of it up, and Meta is displaying it may develop at a wholesome clip whereas additionally dramatically reducing prices, which shrank 8% from a 12 months earlier. So assured is the corporate in its monetary well being that it licensed a $50 billion share buyback and, for the primary time, mentioned it might pay a 50-cent quarterly dividend.

It’s not that Zuckerberg is not keen to spend cash. He simply does not wish to do it on individuals.

Zuckerberg mentioned on the decision that his playbook includes constructing a “world-class compute infrastructure,” which implies spending billions of dollars on Nvidia’s artificial intelligence chips wanted to coach Meta’s AI fashions.

“We’re enjoying to win right here and I anticipate us to proceed investing aggressively in this space in order to construct probably the most superior clusters,” Zuckerberg mentioned. “We’re additionally designing novel knowledge facilities and designing our personal customized silicon specialised for our workloads.”

‘Even past 2024’

Total bills for the 12 months will be $94 billion to $99 billion, Meta mentioned, up from $88.15 billion in 2023. Finance chief Susan Li mentioned capital expenditures will be between $30 billion to $37 billion, “a $2 billion enhance of the excessive finish of our prior vary.”

But on the subject of hiring, Zuckerberg mentioned the times of hyper progress are in the rearview mirror. Meta nonetheless plans so as to add individuals this 12 months for high-paying, technical roles, however will increase in headcount will be “comparatively minimal in comparison with what we’d have finished traditionally,” Zuckerberg mentioned.

“Until we attain a level the place we’re simply actually underwater on our skill to execute, I form of wish to preserve things lean as a result of I believe that is the fitting factor for us to do culturally,” he added.

And that is not simply a story for this 12 months, if Zuckerberg is to be believed.

“I form of anticipate that for the following time period going ahead even past 2024,” he mentioned.

Meanwhile, Meta’s Reality Labs unit, tasked with growing digital actuality and augmented actuality applied sciences, continues to bleed cash and does not seem like slowing down. The division racked up a report working lack of $4.65 billion in the fourth quarter and has now misplaced over $42 billion since late 2020. Revenue, pushed principally by Quest VR headsets, climbed previous $1 billion for the primary time.

Meta mentioned losses at Reality Labs will proceed to “enhance meaningfully year-over-year,” underscoring Zuckerberg’s ongoing perception that the metaverse is the computing platform of the longer term.

He’s not involved with scaring off buyers, acknowledging that the key value cuts have enabled Meta to make “totally different investments the place that is essential,” Zuckerberg mentioned.

“That was the theme that I laid out at the start of the 12 months of effectivity final 12 months, to make us a stronger expertise firm and provides us the flexibleness and stability to execute the long-term targets,” he mentioned.

WATCH: Meta announces first ever dividend of $0.50.

Meta announces first ever dividend of $0.50

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