A year ago, Mark Zuckerberg changed Facebook’s name to Meta and said he was going all in on the immersive digital world of the so-called metaverse.
Since then, Meta has plowed billions of dollars into, and restructured itself around, the emerging technology — just as the global economy has slowed, inflation has soared and investors have begun paying more attention to costs.
The combination has been nothing short of disastrous. This year, Meta’s earnings have been hit hard by its spending on the metaverse and its slowing growth in social networking and digital advertising. In July, the Silicon Valley company posted its first sales decline as a public company. Its stock has plunged more than 60% this year.
On Wednesday, Meta continued that trajectory and indicated that the decline would not end anytime soon. It said it would be “making significant changes across the board to operate more efficiently,” including by shrinking some teams and by hiring only in its areas of highest priority.
The company reported a 4% drop in revenue for its third quarter — to $27.7 billion, from $29 billion a year earlier. Net income was $4.4 billion, down 52% from a year earlier. Spending soared by 19%. Seattle Times