Meta may reportedly cut its budget for metaverse projects by up to 30 percent next year. According to Bloomberg, citing sources, the potential cuts haven’t yet been finalized, but they are expected to impact the unit working on the company’s Quest virtual reality headsets and its social platform, Horizon Worlds.
Metaverse investments are declining
The company, which changed its name from Facebook to Meta and based its vision on virtual worlds, has spent billions of dollars on its metaverse development over the past few years. However, CEO Mark Zuckerberg has shifted its focus to developing Artificial Intelligence (AI) superintelligence.
The company has made high-level hires to this end; most recently, it added former Apple user interface designer Alan Dye to its team to oversee the design of AI integration for hardware, software, and interfaces.
Bloomberg reported that Zuckerberg asked Meta executives to “seek cuts of ten percent across the board” as part of its annual budget planning process. However, Zuckerberg reportedly requested further spending cuts from Metaverse, a division within the company’s Reality Labs umbrella, citing Metaverse’s perceived lack of industry-wide competition.
As part of these potential cuts, Meta could begin laying off Metaverse employees as early as January.
Meta spokeswoman Nissa Anklesaria confirmed the situation to The New York Times: “We are shifting some of our investment from Metaverse to AI glasses and wearables, as momentum has gained within our overall Reality Labs portfolio. We are not planning any further changes.”
According to a Bloomberg report, Meta’s metaverse-focused unit, Reality Labs, has lost over $70 billion since the beginning of 2021, and the company’s latest earnings report indicates that the division continues to burn through cash.
