Meta Halts Construction Of Two Data Centres In Denmark

Meta Platforms continues to reign in its expenses and has halted construction of two data centres in Odense, Denmark.

This is according to Reuters, which quoted a Meta spokesperson on Thursday as saying the firm will instead focus on a new type of data centre used for artificial intelligence (AI).

Construction on the two halted data centres in Odense began in August this year. However, on Tuesday Meta terminated the deal with contracting company Per Aarsleff worth 2.4 billion Danish crowns ($344 million).

Data centres

Meta already has two large data centres in Odense, but only one of the three other centres currently under development there will be completed.

“Over the past month, we have announced a number of measures to make us a more streamlined organisation,” Meta spokesperson Peter Münster told Reuters.

“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 said.

More details of the data centre cancellation was offered by Per Aarsleff in a press release.

“The contract had a value of DKK 2.4 billion,” it said. “The work on the data centre was in progress and will be stopped immediately as a consequence of the termination of contract.”

Meta is already known to operate a 55,000 sqm data centre in Odense, and in August 2022 is said it would add two more buildings to the campus totalling around 90,000 sqm.

But now the addition of these two buildings will be cancelled.

Cost cutting

This year Meta also cancelled a project to build the biggest data centre in the Netherlands, following both local and political opposition

It comes as the social networking giant is currently in the middle of a cost cutting exercise.

Last month Meta confirmed it will axe more than 13 percent of the workforce (or 11,000 jobs), and will extend hiring freeze into Q1, amid the worsening economic conditions.

Those job cuts are the first in the company’s 18-year history, after disappointing results in several previous quarters.

Metaverse spending?

And there is a chance CEO Mark Zuckerberg could also scale down Meta’s heavy spending on the Metaverse, after investor pushback.

“I’m currently in the middle of a thorough review of our infrastructure spending,” he wrote. “As we build our AI infrastructure, we’re focused on becoming even more efficient with our capacity. Our infrastructure will continue to be an important advantage for Meta, and I believe we can achieve this while spending less.”

This admission comes after shareholder Altimeter Capital Management in an open letter in October urged Meta to streamline operations by cutting jobs.

Altimeter also urged Zuckerberg to reduce capital expenditure, and warned him that Meta had lost investor confidence with its increased spending and its focus on relatively little-used metaverse technology.

In its third quarter results in October Meta share price had plummeted after it forecast that it would lose $10bn in ad revenue over full-year 2022 due to privacy changes by Apple that allow iPhone users to opt out of ad tracking across apps.

Meta’s share price had already fallen over 61 percent in 2022.