Meta Starts Cutting Jobs, Signaling a Broader Shift in Strategy
Layoff notifications began on Tuesday morning, according to internal communications.
Key Takeaways
- Meta is eliminating more than 1,000 jobs in its Reality Labs unit, which works on virtual reality.
- Meta began notifying affected workers about layoffs starting on Tuesday morning.
- According to a Meta spokesperson, the move is part of an effort to shift the company鈥檚 investment from the metaverse to wearables.
Meta is cutting more than 1,000 jobs in its Reality Labs division, a unit working on virtual and augmented reality hardware, software and platforms. The move cements a strategic pivot away from the costly metaverse toward AI-powered wearables and phone-based features.
Bloomberg on Tuesday that Meta is eliminating roughly 10% of the staff in Reality Labs, which employs about 15,000 people. Internal communications indicate that layoff notifications begin on Tuesday morning and continue throughout the week.
鈥淲e said last month that we were shifting some of our investment from metaverse toward wearables,鈥 a Meta spokesperson told Bloomberg. 鈥淭his is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year.鈥
Reality Labs includes teams behind Quest virtual reality headsets. The division has generated more than over the past four years, per The New York Times. Meta executives talked about budget cuts as high as 30% for the division in December, according to Bloomberg.
Related: Meta Is Planning to Raise Prices on a Popular Product, According to a Leaked Memo
The cuts are part of a broader reallocation of capital from metaverse projects towards AI wearables, phone-based AI features and massive data center investments branded internally as Meta Compute. Meta CEO Mark Zuckerberg that Meta is planning on building 鈥渢ens of gigawatts鈥 of AI compute capacity this decade, positioning its infrastructure as a key competitive advantage against rivals like OpenAI, Google and Microsoft.
Zuckerberg is also reshaping the company鈥檚 priorities around devices that can bring AI into everyday life, including smart glasses. That focus arrives as Meta鈥檚 latest Ray-Ban smart glasses have received a strong reception, reportedly internal sales expectations.
鈥淲e’re entering a new era where AI glasses and other devices will change how we connect with technology and each other,鈥 Zuckerberg wrote last month. 鈥淭he potential is enormous, but what matters most is making these experiences feel natural.鈥
Related: Meta Reportedly Keeps Lists of Ex-Employees It Won鈥檛 Rehire 鈥 Including Top Performers
Strategically, the layoffs signal Meta鈥檚 belief that AI-enhanced phones and lightweight wearables are a more immediate path to widespread appeal than full metaverse immersion, per Bloomberg. By moving resources toward AI features that can reach , Meta is chasing scale and advertising opportunities that its virtual reality ecosystem has yet to deliver.
Meta intends to reduce its virtual reality investments to create a 鈥渕ore sustainable鈥 business, its chief technology officer, Andrew Bosworth, said in an internal post reviewed by Bloomberg.聽
鈥淲ith the larger potential user base and the fastest growth rate today, we are shifting teams and resources almost exclusively to mobile to continue to accelerate adoption there,鈥 Bosworth wrote.
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Key Takeaways
- Meta is eliminating more than 1,000 jobs in its Reality Labs unit, which works on virtual reality.
- Meta began notifying affected workers about layoffs starting on Tuesday morning.
- According to a Meta spokesperson, the move is part of an effort to shift the company鈥檚 investment from the metaverse to wearables.
Meta is cutting more than 1,000 jobs in its Reality Labs division, a unit working on virtual and augmented reality hardware, software and platforms. The move cements a strategic pivot away from the costly metaverse toward AI-powered wearables and phone-based features.
Bloomberg on Tuesday that Meta is eliminating roughly 10% of the staff in Reality Labs, which employs about 15,000 people. Internal communications indicate that layoff notifications begin on Tuesday morning and continue throughout the week.
鈥淲e said last month that we were shifting some of our investment from metaverse toward wearables,鈥 a Meta spokesperson told Bloomberg. 鈥淭his is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year.鈥
