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Meta’s Reality Labs Faces Budget Cuts as Part of Cost-Reduction Efforts
Meta, formerly known as Facebook, is implementing significant budget cuts within its Reality Labs division, which focuses on virtual reality (VR), augmented reality (AR), and the metaverse. The Information reported on Thursday that the company is taking steps to tighten its budget for Reality Labs.
According to sources cited by The Information, the hardware teams in Reality Labs have been directed to reduce spending by nearly 20% over the next three years, stretching from the current year into 2026. This information comes from a former manager within the division.
This cost-cutting initiative follows a series of layoffs in Reality Labs over the past year, which notably affected middle and senior management positions. Last month alone, more than a dozen vice presidents and directors were reportedly let go, according to The Information.
Despite these changes, Meta has not provided an immediate response to requests for comment on this matter.
Meta has invested over $40 billion into the metaverse, a visionary project spearheaded by CEO Mark Zuckerberg. The company aims to capture a $1 trillion opportunity within the AR and VR markets, as highlighted by its CFO earlier this year. Currently, Meta offers the Quest line of VR headsets and Meta Ray-Ban AI glasses, with additional AR products expected to launch in the future.
On a call with analysts last year, Zuckerberg characterized the metaverse as a “very long-term bet.” He acknowledged the uncertainties surrounding this venture, stating, “I can’t guarantee you that I’m gonna be right about this bet. I do think that this is the direction that the world is going in.”
When Zuckerberg declared 2023 as Meta’s “year of efficiency,” he emphasized that Reality Labs would undergo the same cost-reduction measures applied across other divisions. “We’re looking at the signals and learning what makes sense to do going forward,” he said at the time. “We’re constantly shifting how we execute. Other things like flattening the org structure, those are going to affect the whole company, both in Reality Labs and Family of Apps. We want the work to be more efficient.”
In 2021, Zuckerberg rebranded Facebook as Meta and reiterated the company’s shift in focus towards the metaverse. “From now on, we’ll be metaverse first, not Facebook first,” he declared.
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