A representative for Facebook-owned Meta Platforms Inc (FB.O) confirmed to Reuters on Wednesday that the business is planning layoffs in its Reality Labs section, which is central to the company’s strategy to refocus on hardware products and the “metaverse.”
According to a summary of his comments obtained by Reuters, Chief Technology Officer Andrew Bosworth told Reality Labs colleagues at a weekly Q&A session on Tuesday that the changes would be announced within a week.
The Meta spokeswoman stated that Bosworth informed colleagues that the division could no longer afford to complete certain projects and would have to postpone others, but did not identify which projects would be affected.
She stated that layoffs were not planned as part of the adjustments.
Following a dip in Facebook users earlier this year that led the price to plummet, the world’s largest social media corporation announced to investors last month that it would cut expenditures in 2022.
In a late-April earnings call, CEO Mark Zuckerberg stated that Meta planned to “slow the pace” of some relatively long investments in sectors like its business platform, artificial intelligence infrastructure, and Reality Labs.
Meta reduced its projected 2022 total expenses to between $87 billion and $92 billion, down from a previous range of $90 billion to $95 billion. It informed employees last week that it was curtailing hiring for most mid-to-senior-level positions, as first reported by Insider.
The 18-year-old internet behemoth has made significant investments in Reality Labs, which developed out of its Oculus virtual reality company and now includes work on augmented reality, smart glasses, Portal video-calling devices, and workplace IT solutions.
The business is also developing Project Cambria, a mixed reality headset with facial and eye-tracking that Zuckerberg teased in a post on his Facebook page on Wednesday.
Those efforts are intended at promoting Meta as a portal to the metaverse, a realm of immersive, shared, interconnected digital worlds that Zuckerberg hopes will be the mobile internet’s successor.
The business changed its name in October to reflect its metaverse ambitions, and it has employed heavily to staff Reality Labs, adding over 13,000 employees last year and nearly 6,000 in the first quarter of this year.
At the same time, Zuckerberg has warned that the metaverse bets could take a decade to pay off, and Reality Labs has lost money. In 2021, the unit lost $10.2 billion, with another $3 billion lost in the first quarter of this year.
Last month, Zuckerberg told investors that he still intends to produce enough income growth from legacy programs Facebook, Instagram, and WhatsApp over the next several years to support investments in Reality Labs while maintaining overall profit growth.
