Meta Platforms is planning to close one of its offices in New York after scaling down its expansion plans in the city, according to people familiar with the matter.
The company is exercising its option to terminate its lease at 225 Park Ave South in Manhattan.
Meta has been consolidating its New York workforce, building out offices in Hudson Yards and moving ahead with plans for the Farley Building near Pennsylvania Station. The company has been dialling back some of its growth plans in the city, though, Bloomberg News has reported.
“225 Park Avenue South has served as a great bridge space to get us to our new offices at Hudson Yards and Farley,” Meta spokesperson Jamila Reeves said in a statement.
“We are working to ensure we’re making focused, balanced investments to support our most strategic long-term priorities.”
Meta remains “firmly committed to New York and further anchoring our local footprint”, she added.
The planned closure comes as Meta chief executive Mark Zuckerberg seeks to make sweeping changes, including reorganising teams and reducing headcount at the company for the first time.
Meta will freeze hiring and restructure some teams to trim expenses and realign priorities, Mr Zuckerberg said during a weekly Q&A session with employees.
The California-based company will likely be smaller in 2023 than it was this year, he said, announcing what would be the first major budget cut since the founding of Facebook in 2004.
Meta will reduce budgets across most teams, even those that are growing, and individual teams will handle headcount changes.
That could mean not filling roles when employees depart, shifting people to other teams, or working to “manage out people who aren’t succeeding”, Mr Zuckerberg said.
Earlier this year, the company confirmed it employs 3,000 staff directly in Dublin, with a further 6,000 working in “support services” in Ireland.
The cost cuts and hiring freeze are Meta’s starkest admission that advertising revenue growth is slowing amid mounting competition for users’ attention.
Besides economic pressures, the company’s advertising business, built on precise consumer targeting, has lost some of its edge due to new privacy restrictions from Apple on tracking iPhone users.
Also, rival TikTok is attracting younger users away from Meta’s Instagram platform.
Mr Zuckerberg is also making an expensive bet on the metaverse, an immersive virtual reality future where he imagines people will eventually communicate, an effort he has said will lose money for many years.