A spokeswoman for Facebook-owned Meta Platforms Inc confirmed to reporters on Wednesday that the business is planning cuts in its Reality Labs section, which is at the heart of the company’s goal to refocus on hardware products and the “metaverse.”
According to a summary of his comments obtained by reporters, Chief Technology Officer Andrew Bosworth told Reality Labs colleagues at a weekly Q&A session on Tuesday that the changes would be announced within a week.
Bosworth told colleagues that the division could no longer afford to undertake some projects and would have to postpone others, according to a Meta spokeswoman, without saying which projects would be affected.
She stated that the revisions will not include layoffs.
Following a dip in Facebook users earlier this year that led the price to plummet, the world’s largest social media corporation announced to investors last month that it would cut expenditures in 2022.
In a late April earnings call, Meta CEO Mark Zuckerberg stated that the company wanted to “lower the pace” on several longer-term investments in areas such as its commercial platform, artificial intelligence infrastructure, and Reality Labs.
Meta decreased its forecast for overall expenses in 2022 from $87 billion to $92 billion, down from $90 billion to $95 billion previously. It informed employees last week that it will be curtailing hiring for most mid-to-senior-level positions, as first reported by Insider.
Reality Labs, which came out of Facebook’s Oculus virtual reality business and now includes work on augmented reality, smart glasses, Portal video-calling devices, and workplace tech solutions, has received significant funding from Facebook.
Project Cambria, a mixed reality headset with face and eye-tracking that Zuckerberg displayed on his Facebook page on Wednesday, is also in the works.
Those efforts are aimed at establishing Meta as a portal to the metaverse, a universe of immersive, shared, interconnected digital worlds that Zuckerberg hopes will be the mobile internet’s replacement.
Reality Labs was renamed in October to reflect its metaverse goals, and the business has employed heavily to staff it, with over 13,000 people last year and roughly 6,000 in the first quarter of this year.
At the same time, Zuckerberg has warned that the metaverse bets could take a decade to pay off, and Reality Labs has lost money. In 2021, the unit lost $10.2 billion and $3 billion in the first quarter of this year.
Last month, Zuckerberg told investors that his goal for the next few years is to produce enough revenue growth from legacy programs like Facebook, Instagram, and WhatsApp to finance investments in Reality Labs while maintaining overall profit growth.
“Unfortunately, that isn’t going to happen in 2022, he said.”
