Meta's metaverse division lost $2.8 billion in Q2 2022

Meta reported losses of $2.8 billion for its metaverse-focused division, Reality Labs, as the firm missed on earnings and revenue for the second quarter.

The tech giant's shares dropped as much as 5% in after-hours trading on Wednesday immediately after earnings, before paring losses — down just over 1.5% at the time of writing, according to Nasdaq data.

Its metaverse division, Reality Labs, reported earnings of $452 million for the quarter, down from $695 million in the first quarter. The division previously posted a $2.9 billion loss in the first quarter of 2022. 

Overall the company came in below expectations on Wednesday, with total revenue for the second quarter of 2022 coming in at $28.82 billion — below estimates of $28.9 billion for the quarter. Earnings per share came in at $2.46, below estimates of $2.54.

Meta faced further headwinds on Wednesday as the Federal Trade Commission (FTC) filed a suit against Facebook, alleging the firm is trying to monopolize the entire metaverse industry.

Zuckerberg recently told employees during a weekly Q&A that he believes the economy is headed for one of the “worst downturns that we’ve seen in recent history." The long-time CEO added that some people at the company shouldn't be there, before saying the firm was raising expectations to turn the heat up on its staff.