(Bloomberg) -- Meta Platforms Inc. is headed for its biggest single-day gain in almost a decade after Chief Executive Officer Mark Zuckerberg laid out plans to make the social media giant leaner, more efficient and more decisive.
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Zuckerberg, who has spent the past year promising a faraway future in a digital world called the metaverse, was more focused in a call with investors Wednesday on immediate problems, such as sending users the most relevant videos at the right time, and finally making significant revenue from messaging products. He called 2023 the "Year of Efficiency."
"We're working on flattening our org structure and removing some layers of middle management to make decisions faster, as well as deploying AI tools to help our engineers be more productive," Zuckerberg said on the call. "There's going to be some more that we can do to improve our productivity, speed and cost structure."
Meta, on the rebound after the worst year for its stock in history, stands in stark contrast to other tech companies that have seen their stocks punished for disappointing outlooks. Snapchat owner Snap Inc., for example, plunged 10% after projecting its first-ever quarterly revenue decline. The industry has faced a decline in advertiser demand - as well as a change in privacy rules on Apple Inc.'s iPhone that makes it harder to offer targeted ads. But Meta has countered the slump with measures including a cut of 11,000 jobs, or 13% of the workforce, in November in its first-ever major layoff.
The company's stock surge is the biggest contributor to the Nasdaq 100's rally Thursday, adding more than 10% to the benchmark's climb, according to data compiled by Bloomberg. The tech-heavy gauge is inching closer to entering a bull market as investors pile into growth stocks, wagering that the Federal Reserve's rate-hike cycle is nearing an end.
Meta shares jumped 24% to $189.54 at 10:41 a.m. in New York.
In the call with investors on Wednesday, Zuckerberg said the company is using AI to improve the way it recommends content - a strategy for making the platform more attractive to users and advertisers alike. Digital ads make up the vast majority of its sales, especially from clients in finance and technology. And while ad sales have slumped, the company also pointed to some industries, including health and travel, where businesses are spending more.
Fourth-quarter sales fell 4% to $32.2 billion, the third straight period of declines. Even so, the total beat analysts' estimates, and Meta projected revenue of $26 billion to $28.5 billion for the first quarter, in line with an average projection of $27.3 billion. Analysts are predicting that Meta will return to growth following the current period.
Snap gave a less upbeat outlook on Tuesday, saying it expected sales to decline in the current period. CEO Evan Spiegel said the ad slump appears to be bottoming out. "Advertising demand hasn't really improved, but it hasn't gotten significantly worse either," Spiegel said on a conference call.
Read more: Snap CEO Spiegel Says Digital Advertising Slump Has Leveled Off
Meta's job cuts came during a quarter that was otherwise an improvement for the company. Facebook, Meta's flagship social network, now has more than 2 billion daily users, up more than 70 million from a year ago.
The company also boosted its stock-buyback authorization by $40 billion, adding to the $10.9 billion remaining from previous repurchase programs. In the fourth quarter, Meta recorded restructuring charges of $4.2 billion related to its job cuts.
Zuckerberg has spent tens of billions of dollars on an effort to build the metaverse - a digital world where people can work and play. Those efforts are still in their early stages, which means much of the investment is not leading to immediate returns.
Still, the Menlo Park, California-based company said 2023 expenses will be $89 billion to $95 billion - less than Meta previously forecast. That could help ameliorate investor concerns that the company is overspending on its virtual-reality ambitions.
Capital expenditures in the recent quarter soared to $32 billion. In the fourth quarter of 2021, by contrast, capital spending was $5.54 billion.
--With assistance from Subrat Patnaik and Divya Balji.
(Adds the Nasdaq 100's rally in the fifth paragraph)
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