Facebook (now known as Meta) recently warned its Reality Labs VR development division to prepare for cutbacks, which could be a huge blow to the company’s Metaverse ambitions.
Reuters reports that Facebook, (now Meta) recently warned its primary metaverse development division, Reality Labs, to expect and prepare for cutbacks. Chief Technology Officer Andrew Bosworth told Reality Labs staffers at a weekly Q&A session to expect the changes to be announced within a week.
A spokesperson for the company confirmed that Bosworth told staffers that the division could not afford to continue developing certain projects and that others would be postponed but did not clarify which products were being shelved. The spokesperson noted that the company was not planning to lay off employees as part of the reorganization.
Following a major drop in Facebook users earlier this year that caused the company’s shares to plummet, Facebook told investors that it would be scaling back costs in 2022. In an earnings call, Facebook CEO Mark Zuckerberg said that the company planned to “slow the pace” of some longer-term investments in areas such as its business platform, artificial intelligence infrastructure, and Reality Labs.
Facebook dropped its expected 2022 total expenses to between $87 billion and $92 billion, a reduction from its prior expected costs of between $90 billion and $95 billion. Reality Labs has been a major focal point for Facebook as it continues the development of its metaverse virtual platform.
The division is responsible for the development of its virtual and augmented reality products, smart glasses, and Portal video-calling devices. The company has hired many to staff the division, adding over 13,000 employees last year and almost 6,000 in the first quarter of this year.
The division has, however, consistently cost more than it has made, losing $10.2 billion in 2021 and another $3 billion in the first quarter of this year.
Read more at Reuters here.
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