Meta's Profit Slides by More Than 50 Percent as Challenges Mount

The social networking company, which is trying to shift into the so-called metaverse, posted falling sales and said it was "making significant changes" to operate more efficiently. The New York Times reports: 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 percent 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 percent drop in revenue for its third quarter -- to $27.7 billion, down from $29 billion a year earlier. Net income was $4.4 billion, down 52 percent from a year earlier. Spending soared by 19 percent from a year earlier. The company's metaverse investments remained troubled. Meta said its Reality Labs division, which is responsible for the virtual reality and augmented reality efforts that are central to the metaverse, had lost $3.7 billion compared with $2.6 billion a year earlier. It said operating losses for the division would grow "significantly" next year. For the current quarter, Meta forecast revenue of between $30 billion and $32.5 billion, which would be down from a year ago. The company's shares fell more than 11 percent in after-hours trading. In a statement, Mr. Zuckerberg, Meta's founder and chief executive, acknowledged "near-term challenges on revenue." But he added that "the fundamentals are there for a return to stronger revenue growth" and that he was "approaching 2023 with a focus on prioritization and efficiency."

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