Meta Platforms Inc. is laying off more than 1,000 employees from its Reality Labs division as it shifts resources away from virtual reality and metaverse projects and toward AI-powered wearables and mobile features.
Layoffs Affect About 10% of Division
According to an internal memo from Chief Technology Officer Andrew Bosworth, employees began receiving layoff notifications Tuesday morning. The cuts represent roughly 10% of Reality Labs’ workforce, which totals about 15,000 employees.
Shift From Metaverse to Wearables and Mobile
Bosworth said the company is refocusing its metaverse strategy on mobile devices and scaling back VR investments to make the business more sustainable. Meta confirmed it is redirecting funding from metaverse projects to support growth in AI wearables this year.
Costly Division With Limited Returns
Reality Labs oversees Meta’s experimental and hardware efforts, including VR headsets, AI glasses and virtual world products. Since 2021, the division has lost more than $70 billion, as many of its products have yet to generate significant revenue.
Metaverse Vision Scaled Back
The metaverse has proven especially expensive, with Meta pouring resources into advanced VR headsets and digital features in anticipation of competition that never fully emerged. Adoption has also lagged behind the ambitious vision laid out by CEO Mark Zuckerberg when Facebook rebranded as Meta in 2021.
AI Glasses Gain Momentum
Executives have discussed budget cuts of up to 30% for the metaverse group, while increasing investment in AI glasses. Meta has partnered with EssilorLuxottica to develop smart glasses under brands like Ray-Ban and Oakley, which Zuckerberg has said are performing better than expected.
Focus on Mobile Experiences
Meta plans to continue developing metaverse software, now branded as Horizon, with a strong emphasis on mobile platforms rather than fully immersive VR. Teams are being shifted to prioritize mobile growth, which the company views as offering a larger and faster-growing user base.
VR to Operate as Leaner Unit
While Meta will continue investing in VR headsets, it will do so less aggressively. Bosworth said the VR group will move forward as a leaner organization with a more focused roadmap aimed at long-term sustainability.
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