Meta (NASDAQ: META) Suspends Construction Work on Data Centres in Denmark
CIO Review Europe | Friday, December 30, 2022
Meta (NASDAQ: META) axed the construction of two additional data centres in Europe as Facebook continues cost-cutting measures.
FREMONT, CA: Meta (NASDAQ: META) has put a stop to the development of two data centres in Odense, Denmark as it works to control costs. A Meta representative said that the company will instead concentrate on a new kind of artificial intelligence data centre (AI).
In August of this year, work on the two Odense data centres that were stalled began. However, on Tuesday, Meta cancelled the USD 344 million (2.4 billion Danish crown) agreement with contracting firm Per Aarsleff.
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Data Centres: Only one of the three currently under construction data centres in Odense, where Meta already has two sizable data centres, will be finished. According to a Meta spokesperson, they have announced several initiatives during the past month to make us a more streamlined organisation. The move of a larger portion of resources to high-priority growth sectors, including a strategic investment in artificial intelligence, is a key component of these initiatives.
Per Aarsleff provided more information about the data centre cancellation in a news release. The contract had a value of DKK 2.4 billion. Work on the data centre was ongoing and will come to an abrupt end as a result of the contract termination. Meta is already known to run a 55,000 square metre data centre, it is reported that two additional buildings, with a combined area of about 90,000 square metres, will be added in August 2022. However, the construction of these two structures will no longer be added.
Cost Cutting: Meta cancelled a project to construct the largest data centre in the Netherlands due to local and governmental resistance. The world's largest social networking company is now engaged in a cost-cutting initiative. In light of the deteriorating economic conditions, Meta said last month that it will cut more than 13 per cent of its staff, or 11,000 jobs, and prolong its hiring freeze into the first quarter. After a string of underwhelming quarters, the company made its first employee cutbacks in its 18-year history. It is currently reviewing its infrastructure spending thoroughly. As they develop AI infrastructure, we're concentrating on increasing the effectiveness of our resources.
After predicting that it would lose USD 10 billion in ad income throughout 2022 as a result of privacy improvements made by Apple (NASDAQ: AAPL) that now allow iPhone users to opt out of ad monitoring across applications, Meta's share price crashed when it released its third-quarter results in October. In 2022, the share price of Meta had already decreased by nearly 61 per cent.
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