Meta To Spend More Money Downsizing Real Estate In Second Half Of 2023
Meta isn't quite done cutting its real estate footprint.
The parent company of Facebook, Instagram, WhatsApp and others spent $250M in the second quarter to shrink its office portfolio, down from $850M in Q1, CoStar reports. Meta expects to spend $27B to $30B on capital expenditures this year, down from its previous estimate of $30B to $33B, Chief Financial Officer Susan Li said on the company's Q2 earnings call Wednesday.
By the end of the year, Meta expects to spend a total of $4B on employee severance and facilities consolidation, Li said. With the bulk of its layoffs for the year completed, that leaves a potentially larger share to spend on real estate, CoStar reports. But Meta "continues to assess facilities consolidation," according to the company's filing with the Securities and Exchange Commission.
A massive share of Meta's capital expenditures this year and next will be taken up by its increased emphasis on artificial intelligence, which has a different set of requirements in data centers compared to the company's other business lines, Li said. Some data center projects have been delayed to 2024 as part of the adjustment, resulting in Meta's expectation of higher capex next year.
Meta's continued shrinking of office space comes despite its insistence that employees assigned to a physical office work in person at least three days a week, starting in September. After announcing its workplace plan, Meta put a 122K SF office in Washington, D.C., up for sublease in late June.
Meta's total Q2 revenue was $32B, up 11% year-over-year, according to its quarterly report. Its costs and expenses totaled $22.6B, a 10% year-over-year increase.
