The company, which also owns Instagram and WhatsApp, has seen a slowdown in advertising revenue, leading to its first-ever annual sales decline in 2022. Zuckerberg has shifted Meta’s focus and investment in the past year to virtual reality technology and the so-called metaverse, which he envisions as the next major computing platform.

Meta’s employee ranks expanded dramatically during the Covid-19 pandemic as demand for the company’s digital services increased and Zuckerberg leaned into the moment. The social media giant’s headcount grew 30% in 2020, the first year of the pandemic, and then 23% in 2021. By the time Meta starting eliminating jobs last November, the company had more than 87,000 employees.

As part of its efficiency plan, Meta is focusing on returning to a “more optimal ratio of engineers to other roles,” Zuckerberg said. The company will invest in tools, such as those in artificial intelligence, to help engineers write code faster, to make it “most effective over many years, not just this year.” 

Eoin Treacy's view

Nothing says the pandemic surge is over like a leisure time filler coming close to halving its workforce. Demand for Meta’s products surged during the pandemic because so many people had so much free time. That is no longer the case. Children are back in school and the unemployment rate is close to record lows.

I remain of the view that the focus on the metaverse is a boondoggle until they solve the eye strain issue. Many of the games and possibilities of the metaverse are fun but my 46 year old eyes can’t handle the strain for more than about 20 minutes at time. That’s not a replacement for the hours-long scrolling/swiping patterns of phone usage.  
Nevertheless, cost cutting in the main business lines is likely to drive better profitability and is fueling the recovery of the stock. It gapped higher following the last earnings call and the recovery remains intact.