Feb 1 (Reuters) - Meta Platforms Inc's stricter
cost controls this year and a new $40 billion share buyback sent
shares soaring on Wednesday, as CEO Mark Zuckerberg called 2023
the "Year of Efficiency."The parent of Instagram and Facebook, which has fallen on
hard times amid a broad post-pandemic slump in digital ads, is
focused on improving its content recommendations powered by
artificial intelligence and its ad targeting systems to keep
users clicking.Meanwhile, it will cut costs in 2023 by $5 billion to a
range of $89 billion to $95 billion, a steep drop from the $94
billion to $100 billion it previously forecast, and it projected
first-quarter sales that could beat Wall Street estimates.Meta stock surged nearly 19% in after-hours trade. If gains
hold on Thursday, it would set up the shares for their biggest
intraday surge in a decade and added more than $75.5 billion to
its existing $401 billion market capitalization.Zuckerberg described the focus on efficiency as part of the
natural evolution of the company, calling it a "phase change"
for an organization that once lived by the motto "move fast and
break things.""We just grew so quickly for like the first 18 years,"
Zuckerberg said in a conference call. "It's very hard to really
crank on efficiency while you're growing that quickly. I just
think we're in a different environment now."The cost cuts reflect Meta's updated plans for lower
data-center construction expenses this year as part of a shift
to a structure that can support both AI and non-AI work, it said
in a statement.The digital ad giant faced a brutal 2022 as companies cut
back on marketing spending due to economic worries, while rivals
like TikTok captured younger users and Apple Inc's
privacy updates continued to challenge the business of placing
targeted ads.Meta in November cut more than 11,000 jobs in response, a
precursor to the tens of thousands of layoffs in the tech
industry that followed."Our management theme for 2023 is the 'Year of Efficiency'
and we're focused on becoming a stronger and more nimble
organization," Zuckerberg said in a statement.Monetization efficiency for Reels on Facebook, a short-form
video format, had doubled in the past six months and the
business was on track to roughly break even by the end of 2023
or early 2024 and grow profitably after that, he said on the
conference call.INVESTMENTS STARTING TO PAY OFF"Meta's better-than-feared results should refute concerns
over the state of the digital advertising industry following
Snap's horrible guidance earlier this week," said Jesse Cohen,
senior analyst at Investing.com."Despite all the challenges Meta must deal with, there are
signs the business is still doing well," Cohen said.Shares of peer Alphabet Inc were up 3.3% while
Snap Inc stock rose 1% in after-hours trade on
Wednesday.On the conference call, executives said Meta's
investments in AI-surfaced content and TikTok competitor Reels
were starting to pay off. The company also has been using AI to
increase automation for advertisers and target ads using less
personal data, resulting in higher return on ad spend.Meta forecast first-quarter revenue between $26 billion
and $28.5 billion. That was in with analysts' average estimates
of $27.14 billion, according to Refinitiv.Zuckerberg said generative AI - technology for producing
original prose, imagery or computer code on command - would be
the company's other big theme for this year, alongside
efficiency.Meta was planning to launch several new products that
would "empower creators to be way more productive and creative,"
he said, while cautioning about the cost associated with
supporting the technology for a large user base.However, net income for the fourth quarter ended Dec. 31
fell to $4.65 billion, or $1.76 per share, compared with $10.29
billion, or $3.67 per share, a year earlier. Analysts had
expected a profit of $2.22 per share.The decline was largely due to a $4.2 billion charge related
to cost-cutting moves such as layoffs, office closures and the
data center strategy overhaul.The company previously said it was planning to account for
much of that cost in 2023.(Reporting by Nivedita Balu in Bengaluru, Katie Paul in New
York, Sheila Dang in Dallas and Sayantani Ghosh in San
Francisco; Editing by Matthew Lewis and Bradley Perrett)