What just happened? Meta’s bad year is showing no sign of improving. After reporting its first-ever decline in user numbers in February, the Facebook parent has just recorded another first: a drop in year-on-year quarterly revenue. The division behind its metaverse project had poor showing, too, losing almost $3 billion for the second quarter in a row.

Meta’s earnings report shows it made $28.8 billion in revenue for the April-June quarter. That’s down 1% compared to the same period a year earlier, the first time Meta/Facebook has experienced a revenue drop since going public. The figure also fell short of analysts’ expectations of $28.92 billion. Net income, meanwhile, was down 36% YoY to $6.7 billion.

Meta’s outlook for the rest of the year doesn’t paint a better picture. It forecasts third-quarter revenue between $26 billion and $28.5 billion, lower than the $30.52 billion analysts predict.

As with Twitter and Snap, which experienced similarly disappointing financial results, the faltering economy, competition from TikTok, and a slowdown in the ad industry are being cited as factors behind the results. “We seem to have entered an economic downturn that will have a broad impact on the digital advertising business,” CEO Mark Zuckerberg said on a call with investors. “The situation seems worse than it did a quarter ago.”

Zuckerberg once again blamed Apple’s anti-ad-tracking feature introduced in iOS 14 as a significant issue, with the average price per ad falling 14%. Facebook took out full-page ads in 2020 protesting Apple’s move and claiming the change would destroy small businesses.

It was another tough quarter for Reality Labs; the division focused on Meta’s hardware and metaverse aspirations. It was down $2.96 billion in the first quarter of 2022 and, despite revenue increasing 48% YoY to $452 million, lost $2.8 billion in Q2, adding to the $10.2 billion the division hemorrhaged throughout 2021. We recently heard that Reality Labs is making cutbacks by axing projects, including the dual-camera smartwatch, but it might not be enough to stop it from losing even more money in 2022 than last year.

Despite the continuing losses, Zuckerberg’s faith in the metaverse is not wavering; in fact, the CEO is doubling down on the area. “Given some of the product and business constraints that we face now, I feel even more strongly now these platforms will unlock hundreds of billions of dollars – if not trillions over time,” he said.

Meta’s report came the same day the FTC announced it would seek to block the company’s acquisition of Within Unlimited, creator of the Supernatural virtual reality workout app.

A report from earlier this week revealed that Meta is introducing “ruthless prioritization” and “modified performance standards,” which involves going after low- and medium-performing staff and “transitioning” (firing) them from the company. One person believes up to 10% of workers could lose their jobs. Additionally, Meta is dealing with a trademark lawsuit from another company, also called Meta.