SAN FRANCISCO: Shares in Facebook parent Meta surged Wednesday after the internet titan reported it made a profit of $5.7 billion in the first quarter of this year, beating forecasts after a massive wave of cost-cutting and layoffs.

The profit came on revenue of $28.6 billion and as the number of people using Facebook every month grew to just shy of three billion, an earnings report showed.

“We had a good quarter and our community continues to grow,” said Mark Zuckerberg, Meta founder and CEO.

“We’re also becoming more efficient so we can build better products faster and put ourselves in a stronger position to deliver our long-term vision.”

Zuckerberg, who has called 2023 the “year of efficiency,” added that artificial intelligence being used at Meta is “driving good results” across its business.

Meta shares soared nearly 12 percent to $233.94 in after-market trades that followed the release of the earnings figures.

The company said the number of advertisements shown across its “family of apps” that includes Instagram increased 26 percent from the same period a year earlier, but the average price per ad slipped.

The tech titan ended March with its headcount of employees down to 77,114, with more staffing cuts in the works, Meta reported.

Tech companies across the United States have been laying off workers this year as a reckoning across the sector that started last year continues into 2023.

Facebook has taken the most aggressive track among US big tech firms to downsize its staff and has slashed almost a quarter of its global workforce, more than 20,000 jobs in just a few months.

“The year of efficiency is off to a stronger-than-expected start for Meta,” said Insider Intelligence principal analyst Debra Aho Williamson.

“In this economic environment – and after the disaster that was 2022 – three percent year-over-year revenue growth is an accomplishment,” she added.

Meta had suffered a rough 2022 amid a souring economic climate, which forced advertisers to cut back on marketing, and Apple’s data privacy changes, which have reduced leeway for ad personalization.

Zuckerberg has referred to last year as “a humbling wake-up call” and said it would be wise to “prepare ourselves for the possibility that this new economic reality will continue for many years.”

AI and metaverse

The company is also under pressure for making a huge gamble on the metaverse, the world of virtual reality that Meta believes will be the next frontier online.

This to date has proved to be a bad bet with customers so far unenthused by the technology and artificial intelligence, as epitomized by Microsoft-backed ChatGPT, grabbing the attention.

Meta’s Reality Labs, the division underpinning its metaverse ambitions, reported an operating loss of nearly $4 billion, a cash bleed that will rattle investors.

“Building the metaverse is a long-term project,” Zuckerberg said on an earnings call.

“We remain committed to it.”

Meta will release a new model of its Quest virtual reality headset for consumers later this year, according to Zuckerberg.

“I’m really excited to show the world all of the improvements and new technology that we have developed,” the Meta chief said on the earnings call.

Zuckerberg said that along with the metaverse, artificial intelligence is another “major technological wave” being ridden by the tech titan.

AI is put to work handling content and security as well as in Meta’s ad platform, and ChatGPT-style innovations are enabling whole new classes of products and experiences, according to the chief executive.

“The work happening now is going to impact every single one of our apps and services,” Zuckerberg said of AI.