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Both companies saw a significant boost to their earnings last year, as they focused on generative AI products and took steps to become leaner organisations.
Meta and Amazon have both reported strong 2023 results, boosted by their investments in AI and their cost-cutting efforts during the year.
Meta reported revenue of nearly $135bn for its fiscal 2023 year, a 16pc increase compared to 2022. But it was the company’s net profits that surged the most, rising 69pc to more than $39bn.
This follows a period of decline towards the end of 2022, which saw Meta’s revenue fall for consecutive quarters. At the start of 2023, Meta CEO Mark Zuckerberg said it would be the “year of efficiency” and that the company would become “a stronger and more nimble organisation”.
A month later, Zuckerberg told employees that roughly 10,000 jobs would be cut across Meta’s operations. This was in addition to the job cuts Meta announced in November 2022 that affected 11,000 employees. These job cuts impacted hundreds of staff in Ireland.
Meta said its restructuring changes – which includes layoffs, data centre initiatives and “facilities consolidation” – cost $4.61bn in 2023.
The company saw growth to its family of apps, which includes Facebook, Instagram, WhatsApp and Threads. The monthly active users across these apps was 3.98bn by the end of December 2023, an increase of 6pc year over year.
Ad impressions across these apps increased by 28pc in 2023 compared to 2022, while the average price per ad dropped by 9pc.
Meta has been putting generative AI features into some of its apps such as Instagram and announced various AI tools to support creators on its platforms. The company appears to have shifted its focus from the metaverse to AI and is currently focused on researching “general intelligence” AI.
Zuckerberg previously said that the metaverse remains a major part of the company’s vision. But these metaverse ambitions continue to be a burden on the company’s finances each year. Meta’s Reality Labs division – which handles the company’s metaverse and VR goals – reported losses of more than $16bn in 2023, after losing more than $13.7bn in 2022.
Mike Proulx, VP and research director with Forrester, said the results reaffirm that Meta is – or will become – “an AI company above all else”.
“While the metaverse was mentioned, it continues to take a back seat to AI, as it should,” Proulx said. “Meta expects even greater losses this year in its Reality Labs division which will only continue to raise questions as to how long the company digs its heels into an increasingly unsure bet.”
Meanwhile, Meta is facing legal issues in the US over allegations that it has failed to protect young people from harm on its platforms. Zuckerberg was one of five social media CEOs that was subjected to hours of questioning by US senators earlier this week.
Amazon
Meanwhile, Amazon saw its net sales increase by 12pc in 2023, reaching nearly $575bn. This growth was steady across the company’s North America, international and Amazon Web Services (AWS) segment sales.
Like Meta, Amazon saw a dramatic leap in its net income last year. The tech giant’s net income was $30.4bn for 2023, compared to a net loss of $2.7bn in 2022.
The company also had periods of mass layoffs in both 2022 and 2023, as Amazon worked to become a leaner organisation.
Amazon CEO Andy Jassy called the annual results “robust” and said the last quarter was a “record-breaking holiday shopping season”. He also noted the growth in AWS, boosted by its focus on AI.
“AWS’s continued long-term focus on customers and feature delivery, coupled with new genAI capabilities like Bedrock, Q, and Trainium have resonated with customers and are starting to be reflected in our overall results,” Jassy said. “Our advertising services continue to improve and drive positive results, our newer businesses are progressing nicely, and along with our more established businesses, collectively making customers’ lives easier and better every day.
“As we enter 2024, our teams are delivering at a rapid clip, and we have a lot in front of us to be excited about.”
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