Home News Meta to Drop $3B to Cut Down Its Office Space – Commercial Observer

Meta to Drop $3B to Cut Down Its Office Space – Commercial Observer

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meta It might be expected to build a New York City campus around pennsylvania stationbut the company plans to drop some serious coins to get out of office leases as it works to cut costs.

Facebookare paid by the parent company of at least $2.9 billion From the end of this year to 2023, office footprints will need to shrink globally, executives said in company documents. Third Quarter Financial Results Announcement on wednesday.the price tag of the office The cut was first reported by real.

“Increased scrutiny in all areas of operating expenses.” Dave WennerMeta’s Chief Financial Officer (CFO) said on a conference call: “Some steps, such as streamlining our ongoing office footprint, will lead to higher costs in the short term.”

of Instagram When whats up The owner plans to spend about $900 million to shrink its office footprint in the fourth quarter of 2022, and plans to spend another $2 billion to do the same by the end of 2023. , says Wehner. Meta’s move to cut real estate came after his third quarter earnings were down 4% from the previous quarter. Shares down 24%.

Meta already spent $413 million in the third quarter and canceled some leases. 200,000 square foot office 225 Park Avenue South, “matching our office facility footprint to our anticipated operational needs,” Wenner said on the earnings call.The company also Canceled planned 300,000 square foot expansion and Bornado Realty Trustof 770 Broadway in July.

The next building on the chopping block is unknown, and Meta did not immediately respond to a request for comment.But the tech giant certainly has New York City has a lot of options.

Meta has a lease of 1.2 million square feet. 50 Hudson Yards265,000 square feet 30 Hudson Yardsat 57,000 square feet 55 Hudson Yardsat 95,000 square feet 335 Madison Avenue plus 730,000 square feet furry building.

The company plans to consolidate its space into the Penn Plaza/Hudson Yards area, “being firmly committed to New York and further entrenching our footprint,” a spokesperson previously told the Commercial Observer. I’m talkingas a company Reorientation of work centered on remote work Reduce costs by freezing or firing certain teams, Michael Cohen,president ColliersTri-State Region, which brokered Facebook’s deal with Park Avenue South, told CO it hopes the tech company will continue to grow in the city.

And Meta’s data center footprint — a A market with huge demand and historically low vacancy rates — may also grow. Meta plans to expand its data center capacity in 2023 and spent $9.5 billion on capex in the third quarter. Much of that expense comes from leasing servers, data centers, and other network infrastructure upgrades.

You can contact Celia Young at: [email protected].

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