Mark Zuckerberg’s “Year of Efficiency” mantra at Meta (META) in 2023 has begun to yield results, one of the company’s top execs says.
“What we’ve seen through the changes that we’ve made, which, let’s be honest, have been some very difficult things to do internally, actually we’re seeing a freeing up of the way in which people are thinking,” Meta’s head of global business group Nicola Mendelsohn told Yahoo Finance Live at the Cannes Lions Festival of Creativity (video above).
She added: “From my side, the product and the business teams have come together and we’ve never been closer than we are right now, and we’re seeing that actually in the output from the product teams.”
The changes at Meta have been fast and furious, to say the least.
Meta sacked 11,000 employees (then 13% of its workforce) in November of last year amid pressure from large investors to shore up profit margins. Some of those cuts went as deep as canning cafeteria workers.
The company didn’t stop there.
In March, Meta announced it would layoff off an additional 10,000 employees through multiple rounds of cuts. It also committed to closing hiring for 5,000 open roles and canceling lower-priority projects.
Sources familiar with Meta’s plans have told Yahoo Finance more resources are being allocated to developing new AI technologies and fresh features for WhatsApp and Reels. Fewer resources are going to the metaverse, people familiar say, but the initiative pioneered by Zuckerberg is still a focal point despite tepid user interest.
Wall Street has taken notice of what is shaping up to be a return to profit growth for Meta in the second half of this year. The profit gains are poised to be supported by the aforementioned cost cuts, a slightly improved advertising market and traction in monetizing Reels.
Shares of Meta have surged 139% year to date, outperforming the Nasdaq Composite’s nearly 30% gain.
“We continue to expect Meta to reaccelerate growth in 2023 faster than peers given lapping IDFA [Identifier for Advertisers] comps, ramping Reels and messaging monetization, increasing adoption of Advantage+ products and advertiser preference for core platforms. We also think Meta’s compute assets could help the company build a bigger AI-based services business (ad creation, ad distribution, and customer service), potentially reducing concerns around terminal value uncertainty,” Bank of America analyst Justin Post wrote in a research note.
Meta’s Mendelsohn is hopeful the culture change (or shock) will continue to yield positive results.
“We’re just getting going,” Mendelsohn said. “So people can feel it. Yes, it’s a change. Yes, it’s a shift. But actually I think it goes back to what actually is kind of the secret sauce of what makes Meta great.”
Brian Sozzi is Yahoo Finance’s Executive Editor. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations or anything else? Email [email protected]
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