On Tuesday, Meta started issuing layoff notices to employees, planning to cut over 1,000 positions in the Reality Labs department. This move is seen as another "reprioritization" of the company's hardware strategy: becoming more cautious about investments in virtual reality and the metaverse, while placing more emphasis on AI wearable devices and mobile functions.
Layoff Impact: About 10% of Reality Labs Staff Affected
According to information disclosed in an internal memo, this round of layoffs is expected to affect about 10% of Reality Labs employees. The department, which is roughly 15,000 strong, covers VR headsets, smart glasses, and related software ecosystems. Meta's Chief Technology Officer Andrew Bosworth emphasized in the memo that organizational adjustments will align with the product roadmap to enhance business sustainability.
Resource Shift: Metaverse Experience Turns Towards "Mobile," AI Glasses as New Focus
A Meta spokesperson stated that the company had previously indicated a shift in some investments from the metaverse to wearable devices. This personnel and budget adjustment is part of that plan, and the resources saved will be used to support the growth of wearable devices this year. Meanwhile, the development of metaverse-related software experiences ("Horizon") will focus more on mobile platforms, aiming to leverage a larger user base for faster penetration.
On the hardware side, Meta's smart glasses launched in collaboration with EssilorLuxottica were repeatedly mentioned: Ray-Ban (and more series to follow) is one of the key platforms for implementing AI assistants.
Long-Term Loss Pressure: High-Investment VR/Metaverse Business Demanded to "Become More Self-Sustaining"
The financial performance of Reality Labs has been a focal point of controversy for years. According to reports, since early 2021, the department has accumulated losses exceeding $70 billion, while Reuters pointed out that the losses from related investments since 2020 have reached over $60 billion. Despite different metrics, the common signal is that the commercial returns of metaverse projects are still hard to match the intensity of the investment.
Budget and Organization: Continuing VR, but with More Caution and a Flatter Structure
Reports also mentioned that Meta internally discussed a more significant budget reduction for the metaverse department (up to about 30%) to allocate funds to more growth-expected areas like AI glasses. Bosworth noted in the memo that the VR team would operate with a more streamlined organizational structure and a more focused product roadmap, with the aim of keeping long-term investments on a "sustainable" path.
