Meta’s earnings for the past three months declined compared to the same period last year, marking the second quarter in a row the tech giant saw a dip in revenue after years of growth.
Meta, the parent company of Facebook, reported in Wednesday’s third quarter earnings release a revenue of $27.1 billion, representing a 4 percent decrease compared to the same time period last year.
After the report was released, Meta’s stock dropped by around 12 percent in after-hours trading.
Meta’s report said the company expects to see revenue in the fourth quarter between $30 billion and $32.5 billion.
The company will also make hiring changes in some places, hold teams flat and in other areas, make cuts. Meta predicted its headcount at the end of 2023 will be around in line with the third quarter of this year.
The company said it expects operating losses for Reality Labs, the project to expand its virtual reality services, to “grow significantly” in 2023. After 2023, Meta said it expects to pace investments in Reality Labs to “achieve our goal of growing overall company operating income in the long run.”
The CEO of Meta investor Altimeter Capital earlier this week published an open letter that in part urged Meta to limit its investments in virtual reality to help steer the company back on track.
But the company, which rebranded as Meta last year, doesn’t seem to be showing signs of reining in its expansion into the metaverse.
Meta warned investors of revenue hits it expected to face with the launch of Apple’s updated operating system last year, which allowed users to choose whether an app tracks their data across other apps. The update hit Meta’s targeted advertising business model.
Meta is not the only tech company facing economic hardships. Google on Tuesday reported a 2 percent year over decrease for YouTube advertising revenue, and Snap Inc., parent company of Snapchat, reportedly also said its continuing to see a decline in revenue growth for the most recent quarter.