The building of two data centers in Odense, Denmark, has been put on hold by Meta Platforms Inc. It will now concentrate on a new kind of data center for artificial intelligence (AI). A spokesperson on Thursday reported the news.
In Odense, which Facebook owns, Meta already operates two sizable data centers. But only one of the three that are now under construction will be finished.
According to Meta spokesperson Peter Münster, “over the past month, we have announced a number of measures to make us a more streamlined organization.”
“A significant part of these measures is to shift a larger part of our resources to high-priority growth areas, including a strategic investment in artificial intelligence,” he added.
After experiencing a string of bad quarters, Meta announced last month that it would be eliminating 11,000 jobs. This a first in the 18-year history of the company.
Servers for popular applications like Facebook and Instagram are housed in the company’s conventional data centers. But according to Münster, the calculations required for AI demand a new generation of data centers.
The two data centers in Odense, whose construction has been stopped, started in August. But on Tuesday, Meta canceled the $344 million ($2.4 billion) contract with contracting firm Per Aarsleff.
Meta CEO Mark Zuckerberg’s aggressive push into virtual reality
Meta has developed into one of the most valuable companies in the world over the years. Meta has a powerful grip over the media ecosystem. Thanks to Facebook, Instagram, and WhatsApp.
However, when TikTok gained prominence, things started to change. For the first time in 18 years, Meta experienced a fall in daily active users.
The company’s dominance is beginning to reveal cracks when you combine this with a sluggish economy, Apple’s privacy initiatives, and Meta CEO Mark Zuckerberg’s aggressive push into virtual reality. It only recently disclosed significant layoffs.
Early in November, the made nearly 11,000 layoffs, cutting its staff by 13%. Moreover implemented a recruiting freeze that will last until the first quarter of 2023. As a result, the metaverse division will experience fewer cuts than Facebook, Instagram, and WhatsApp, accounting for most of the layoffs.
The business and recruitment teams are the most impacted sectors. At the end of September 2022, Meta employed 87,314 people. This was a 28% rise from the previous year.
Meta had been on an ongoing hiring frenzy before the layoffs. As a result, it went to tremendous pains to find top people and provide exceptional employee benefits, such as 30 days of paid time off every five years.