Meta plans budget cuts in its virtual reality and metaverse division

Andrew Bosworth, Meta’s Chief Technology Officer, told Reality Labs staff that changes would be announced within a week. The American giant is preparing a small austerity cure…

Meta reviews its financial copy for Reality Labs. Indeed, the Menlo Park firm is preparing budget cuts for its division dedicated to virtual reality and the metaverse, according to information confirmed by a spokesperson for the group at Reuters. Andrew Bosworth, the American giant’s Chief Technology Officer, told Reality Labs staff that the changes would be announced within a week during a weekly question and answer session, including Reuters was able to consult the summary. However, layoffs are not on the agenda.

Meta’s spokesperson also told the news agency that Andrew Bosworth clarified to employees at the meeting that Reality Labs could no longer afford to pursue some projects and that the division had to postpone others. , without revealing which projects are affected by these budget cuts. A way of saying that the American firm must review its priorities as it faces a slowdown in its growth. In particular, Meta cites the war in Ukraine and Apple’s privacy changes as business challenges for the group.

Slow recruitment

In this context, Facebook’s parent company will slow down the pace of recruitment. This slowdown in hiring was caused by lower-than-expected revenue forecasts. When publishing the social media giant’s results for the first quarter of 2022, David Wehner pointed out that the current situation was pushing the group to cut costs, indicating that its expenses this year would be between 87 and 92 billion dollars, against an initial range of between 90 and 95 billion dollars.

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This austerity cure comes after the big blow suffered by the American giant at the start of the year, when it announced that Facebook had lost users for the first time in its history. Bad news sanctioned on Wall Street, with a share that plunged nearly 25% in a few hours, wiping out more than 200 billion dollars in market capitalization.

Additionally, Meta’s virtual reality and metaverse division, Reality Labs, conceded a loss of $10.2 billion for the whole of 2021 and $3 billion in the first quarter of 2022, is $13 billion in losses in just 15 months. But this is the price to pay for the Californian company to build its metaverse.

In the latter, Mark Zuckerberg has set himself the goal of welcoming one billion people by 2030, the horizon at which this parallel world, considered the “future of the Internet”, could become profitable, according to the CEO of the giant of social networks. For now, the group’s only revenue in virtual and augmented reality comes from sales of its Meta Quest headset (ex-Oculus Quest), which brought in $ 2.3 billion in 2021.

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Meta plans budget cuts in its virtual reality and metaverse division


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