Meta is backing out of a major New York office deal as it prepares to cut budgets across the company

“Two twenty-five Park Avenue South has served as a great bridge space to get us to our new offices at Hudson Yards and Farley,” a Meta spokesperson told Fortune. “We are working to ensure we’re making focused, balanced investments to support our most strategic long-term priorities. We remain firmly committed to New York and further anchoring our local footprint.”

The California-based tech giant has been scaling back its expansion in the city. Earlier this year, it ditched plans to lease 300,000 square feet of workspace in Astor Place, where it already has an existing office, according to Bloomberg. The company had also planned to add more office space in New York’s Hudson Yards, but has since put it on pause. 

Other tech companies have also pulled back in New York. Amazon was in discussions with JP Morgan & Chase to lease some of its office space, but then reportedly suspended the talks. 

Mark Zuckerberg, Meta’s CEO, has talked about trying to grapple with the slowing economy that he recently described in a call with employees as among the “worst downturns that we’ve seen in recent history,” according to Bloomberg. The company is cutting budgets including slowing hiring and reducing headcount while also planning to reorganize some of its business units.

It would be the first major budget cuts at Meta since its founding 18 years ago.

Zuckerberg has pushed Meta, which also owns Instagram and Whatsapp, to focus more on the metaverse, a largely unrealized virtual world. But the company’s huge spending on the project isn’t expected to pay off for years while advertising, its main business, faces challenges as marketers cut back on spending due to the souring economy.