Meta Loss $3.9B In First Quarter After Pumping More Money Into Metaverse
- Meta posted an operating loss of $3.99 billion in the first quarter, which equates to a 24% drop in profits in the first quarter compared to last year.
- The Metaverse division is still getting extra funding while downsizing its social media company through cost-cutting.
- While Zuckerberg is advertising his plans to harness artificial intelligence, that doesn’t mean the company is downplaying its metaverse vision.
Meta’s Reality Labs unit posted an operating loss of $3.99 billion in the first quarter, following a loss of $13.72 billion last year.
The parent company of Facebook, today released the company’s unaudited financial statements for the first quarter of fiscal year 2023 through March 31. The report shows Meta’s total revenue for the first quarter was $28.645 billion, up 3% from $27,908 billion in the same period last year, but net profit was $5.709 billion, down 24% from $7.465 billion in the same period the previous year.
The tech giant has seen an increase in ad revenue from a year earlier, but its metaverse division continues to burn money. Reality Labs had $339 million in revenue for the quarter, compared with $695 million in the same period last year. Labs lost $3.9 billion in the quarter, compared with a loss of $2.9 billion a year earlier.
Zuckerberg has touted 2023 as the company’s “productive year” and has implemented major cost-cutting initiatives, including layoffs at an expected 21,000 employees. But while the company goes down, it still pumps billions of dollars into the Metaverse after changing its name from Facebook in late 2021.
The company cut 11,000 employees last November, announced it would lay off an additional 10,000 workers last month, and close 5,000 job openings as the company seeks to restructure its structure and eliminate other jobs low priority projects.
In the announcement, Zuckerberg said Metaverse remains “at the heart of defining the future of social connectivity.” Still, it will also rely heavily on AI as the “biggest single investment” after the success of OpenAI’s ChatGBT. Zuckerberg added that while the company is advertising its plans to harness artificial intelligence, that doesn’t mean it is downplaying its metaverse vision.
“A narrative has developed that we’re somehow moving away from focusing on the metaverse vision, so I just want to say up front that’s not accurate (…). We’ve been focusing on both AI and the Metaverse for years now and we will continue to focus on both.”Zuckerberg said.
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