Meta Platforms (NASDAQ: META), the parent of Facebook, this week indicated that it will be conducting an enlarged share buyback program, despite stating that it is looking to cut costs wherever possible, including the laying off of 11,000 employees, or roughly 13% of its staff.
In reporting its earnings earlier this week, the company indicated it is making an advanced effort to reduce costs as they head into 2023. Prior total expense guidance of $94 billion to $100 billion has been reduced to a range of $89 billion to $95 billion, following restructuring efforts being made by the company, including “slower anticipated growth in payroll expenses.”
Among its restructuring efforts, the company is conducting a facilities consolidation via abandoning, subleasing, and early terminated its leases at several office buildings and pivoting on its data center design by cancelling “multiple data center projects.” Those office buildings are able to be abandoned after the firm cut 11,000 jobs from its Family of Apps (which includes Facebook, Instagram, Messenger, WhatsApp and other services) and Reality Labs segment, with the layoffs slated to be completed before the end of the first quarter.
Cutting jobs for investor returns
Despite the slashing of jobs at the company, Meta is set to place a renewed focus on providing investor returns via share repurchases. During the fourth quarter the company spent $6.91 billion on share repurchases – the same quarter in which layoffs were initially announced and begun. Total buybacks for 2022 meanwhile totaled $27.93 billion. As of December 31, the company had $10.87 billion in available cash that had been authorized for repurchases.
But that wasn’t enough.
In connection with the release of Meta’s fourth quarter financials, the company announced that it would be increasing its share repurchase authorization by a whopping $40 billion – bringing the total current figure allocated for share buybacks to over $50.8 billion.
The job cuts comparatively are estimated to save the company $1.0 billion to $2.0 billion in headcount costs per year.
Meta Platforms last traded at $193.10 on the Nasdaq.
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