Despite a challenging 2022 and widespread layoffs, advertising mogul Martin Sorrell predicts that Meta will recover “very strongly this year” and envisions a bright future for American digital giants.
Over 60,000 employees have been laid off by American IT companies in the past year as a result of sluggish economic development, rising borrowing rates in reaction to skyrocketing inflation, and tougher competition. impacted tech giants’ stock values and tightened profitability.
In November, Facebook parent company Meta revealed intentions to lay off 13% of its workforce, or more than 11,000 workers. Additionally, it provided dire fourth-quarter forecast, which destroyed about a quarter of its market cap and caused the stock to drop to its lowest level since 2016.
The social media company’s business has suffered over the past year as a result of a general slowdown in online advertising expenditure, competition from fresh challengers like TikTok, issues related to privacy changes made to Apple’s iOS, and other factors.
The corporation has also suffered significantly as a result of its significant investment in creating the metaverse, an augmented reality world, a plan that has divided analysts and investors.
Sorrell, executive chairman of the British advertising firm S4 Capital, anticipates that Meta will overcome the majority of its business obstacles in 2023 and gain from China’s reopening.
Sorrell told CNBC on the margins of the World Economic Forum in Davos, Switzerland, “I think you’ll see Meta come back extremely strongly this year, on the back of reels and business messenger, to cope with the challenge from TikTok and other short form video competitors.”
“Google had a strong year last year, and I anticipate that they will continue to do so this year. Despite what you may be witnessing in terms of jobs and hiring, Amazon grew its advertising income from $31 billion to $41 billion, and I believe [it] will exceed $100 billion in time.
Additionally, he asserted that the reopening of the Chinese economy would be “massive” for major tech companies, noting that Chinese companies moving outside had historically generated the second-largest profits.
After quitting advertising behemoth WPP in 2018, Sorrell founded S4, which works in both the digital advertising and digital transformation industries. On Wednesday, S4 reaffirmed its full-year forecast, and Sorrell stated that “topline increase in activation and performance” and “lowering [the] cost of digital transformation” will be his customers’ advertising expenditure goals in 2023.