Facebook parent company Meta has announced cuts in its RealityLabs division. This arm of the company focuses on Meta’s hardware efforts, develops the tech giant’s virtual and augmented reality products, and plays a key role in the tech giant’s long-term strategy to establish the “metaverse.” A Meta spokesperson confirmed to Reuters that some RealityLabs projects are being postponed, while others are being canceled altogether. For the time being, there are no concrete details about which companies will be affected.
For the most part, this news comes as no surprise. Earlier in May, Meta announced that they will be cutting back on new hires. The company is ruling out layoffs, at least for now.
Meta’s earnings reports published in recent months show that the company’s financial growth is stagnating. The RealityLabs division in particular is running at a loss. Some steps to address investment problems were imminent.
What’s interesting, though, is that no one in Meta really expected RealityLabs to achieve short-term financial success. Mark Zuckerberg, the company’s CEO, has always made it clear that RealityLabs could last the better part of a decade? start paying off.
Therefore, Meta currently relies on revenue from their social media platforms to fund their long-term ambitions. At least in theory, this has been the company’s financial strategy. Given the fluctuating number of daily Facebook users, some doubt has arisen about the long-term viability of this business model.
In any case, these cuts indicate a certain hesitation on the part of Meta regarding the direction of the company. When Facebook originally renamed itself to reflect their newfound emphasis on the metaverse, confidence in the project, however adventurous, seemed unwavering. Now it seems that Meta has reservations.