Meta, the parent company of Facebook, Instagram and WhatsApp, has reported a decline in its massive user base. In an earnings call on Wednesday (via The Verge), the company revealed it lost approximately 20 million daily active users across its family of apps this quarter. The drop comes at a time for the tech giant, which is simultaneously asking investors for billions more to fund a massive pivot into Artificial Intelligence (AI).
Meta blames Iran and Russia for drop
Meta is attributing the decline in “Family Daily Active People” primarily to external geopolitical factors. The company pointed to two main causes for the fall. The first is conflict in Iran: Ongoing internet disruptions in the region have made it difficult for users to stay connected, Meta said. Russian restrictions: A crackdown on access to WhatsApp within Russia has cut off millions of potential daily users, according to the company.
Meta to spend billions to win the AI race
Despite the dip in users, Meta CEO Mark Zuckerberg is not pulling back on spending. In fact, the company has significantly increased its budget for 2026. Meta now expects to spend between $125 billion and $145 billion this year, which is about $10 billion more than originally planned.The company says this massive investment is being driven by the rising cost of computer chips and the need to build more data centers to power its AI ambitions.Adding to the company’s pressure is a wave of legal challenges regarding youth safety. Meta warned investors that several ongoing lawsuits, which allege the company misled the public about the harms of its products, could eventually result in a “material loss.”This warning follows two high-profile trial losses in March, where juries sided against the company in cases involving consumer safety and product harm.
Meta on downsizing the workforce
To balance the books while ramping up AI spending, Meta is undergoing a significant “slimming down.” While headcount sat at nearly 78,000 in March, a massive wave of job cuts is currently underway. Meta announced last week it is laying off roughly 8,000 employees, and the company has also scrapped plans to fill 6,000 open roles.
