Meta abandons offices at Hudson Yards as tech giant cuts costs

Meta abandons offices at Hudson Yards as tech giant cuts costs

Facebook’s parent company Meta is abandoning offices it rented in New York’s Hudson Yards complex – the latest sign of belt-tightening at the Silicon Valley-based tech giant that recently laid off thousands of workers. ’employees.

Meta will vacate 250,000 square feet of office space at 30 and 55 Hudson Yards, though it will maintain the bulk of its footprint — around 1.2 million square feet — in the unfinished 50 Hudson Yards, told The Post a source familiar with the matter.

Meta has notified the building’s owner, Related Cos., of its intention not to renew its lease at 30 and 55 Hudson Yards at the end of 2024.

Meta told investors last month that it plans to take a $2 billion charge to shore up its office space.

The company rented the office space at 30 and 55 Hudson Yards, intending it to be a “transitional space” or a temporary office that it would use before moving into its address at term at 50 Hudson Yards.

“We remain firmly committed to New York City, as evidenced by the recent opening of the Farley Building and 50 Hudson Yards, which are estimated to open next year, further strengthening our local footprint,” said Tracy Clayton, gatekeeper. word of Meta. Post on Wednesday.

TOPSHOT - Hudson Yards in downtown New York is pictured on December 4, 2018. - Hudson Yards is the largest private real estate development in United States history and New York's largest development since Rockefeller Center.  (Photo by TIMOTHY A. CLARY/AFP) (Photo credit should read TIMOTHY A. CLARY/AFP via Getty Images)
Meta will free up 250,000 square feet of office space at 30 and 55 Hudson Yards, although it will retain approximately 1.2 million square feet in the unfinished 50 Hudson Yards.
AFP via Getty Images

The Post contacted Related Cos. to get feedback.

In 2019, Meta, which at the time was still known as Facebook, signed a lease to lease more than 1.5 million square feet of office space in three towers at Hudson Yards.

Most of the space was at 50 Hudson Yards, where Meta is subletting part of its footprint, Clayton told the Post, confirming something first reported by Bloomberg.

The downsizing follows the announcement by Meta CEO Mark Zuckerberg that the company will cut 11,000 jobs – or about 13% of the 87,000 employees – due to severe economic headwinds.

Meta’s stock price has fallen more than 65% in the past year, a six-year low.

In its latest earnings report, Meta said revenue fell for the second consecutive quarter as the company struggled with declining advertising sales due to stiff competition from growing social media app TikTok. .

The Menlo Park, Calif., company earned $4.4 billion, or $1.64 per share, in the three months that ended Sept. 30. That’s down 52% from $9.19 billion, or $3.22 per share, in the same period a year earlier.

Revenue fell 4% to $27.71 billion from $29.01 billion, slightly higher than the $27.4 billion analysts had predicted.

Zuckerberg has come under fire from Wall Street as investors turned bearish on the company’s multi-billion dollar bet on its metaverse project.

Prior to the recent downturn, Meta expanded its real estate footprint in New York in anticipation of a massive return of its employees to the office.

Facebook CEO Mark Zuckerberg speaks during a livestreamed virtual and augmented reality conference to announce Facebook's renaming as Meta, in this screen grab from a video posted on 28th October 2021. Facebook/Handout via REUTERS ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY.  NO RESALE.  NO ARCHIVES.  COMPULSORY CREDIT
The downsizing follows Meta CEO Mark Zuckerberg’s announcement to cut 11,000 jobs, or about 13% of its 87,000 employees.

In August 2020, he leased 720,000 square feet in Vornado’s Farley Building.

As Meta scales back its presence in the Big Apple, tech rival Google is doubling down on its strategy of bolstering its footprint in the region in hopes of attracting talent.

Sundar Pichai, CEO of Google’s parent company, Alphabet Inc., told Crain’s New York Business that he was “personally optimistic over the long term about our growth in New York as a business.”

Pichai put his money where his mouth is. Last year, Google announced it was buying the St. John’s terminal building on West Houston Street near the Hudson River for a whopping $2.1 billion.

Pichai told Crain’s that Google plans to open offices there by the middle of next year.

Google is also developing two other sites in the Hudson Square section of Manhattan. In total, the three buildings will comprise a campus totaling 1.7 million square feet.

Earlier this year, Google unveiled a new campus on Pier 57 that will include offices in three buildings.

Last September, Google employed 12,000 people in the city. The company said it aims to increase that number by 2,000 employees in the coming years.

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