Additional Coverage:
- It turns out Mark Zuckerberg does have a breaking point with spending on Meta’s metaverse ambitions (newsbreak.com)
Meta, the tech giant formerly known as Facebook, is reportedly placing tighter controls on its financial resources within its Reality Labs division, according to The Information. This division, which is pivotal for developing virtual reality (VR), augmented reality (AR), and metaverse technologies, is facing a reduction in spending.
The company’s CEO Mark Zuckerberg, who has been a major advocate for the metaverse as a significant development for the company, has declared cuts in costs, reflecting a shift from previous years of extensive investment. Meta has been deeply invested in these technologies, spending over $40 billion on its metaverse initiatives. Despite the large financial commitment and expectations to tap into a $1 trillion market for AR and VR technologies, the Reality Labs has been instructed to decrease its budget.
Layoffs have impacted the division in the past year, focusing mainly on middle and senior management levels, including more than a dozen vice presidents and directors just last month. This effort to streamline operations coincides with Zuckerberg declaring 2023 as Meta’s “year of efficiency”, indicating that cost reductions will be a company-wide policy.
Meta’s Reality Labs currently offers products like the Quest line of VR headsets and Meta RayBans AI glasses, with more advanced AR glasses planned for the future. In a previous discussion with analysts, Zuckerberg described the investment in the metaverse as a “very long-term bet” while acknowledging the uncertainty and ambitious nature of this endeavor.
In a broader move to redefine the company’s focus, Zuckerberg renamed Facebook as Meta in 2020, emphatically shifting the company’s priority from social media to becoming a metaverse-centric organization. This rebranding emphasizes a future where the metaverse takes precedence over traditional social media platforms. Meta has not yet responded to requests for comments on these recent reports.