New reports claim that Meta is planning cutbacks for its Reality Labs division. The cutback will not involve layoffs, and instead, aim to halt some projects and delay others.
Meta is going to introduce some cutbacks for its metaverse department, Reality Labs, according to one executive who informed Reuters of the change on May 11. Reality Labs is the metaverse division that is responsible for apps in the virtual space, as well as related hardware products.
Reuters also received a summary of the conversation that Chief Technology Officer Andrew Bosworth had with members of the division. There will be no layoffs; the cutbacks will instead focus on the halting of some projects and delaying of others. There has been no information on which projects will be cut, and Meta is working on quite a few at the moment.
The company had made it publicly known that it would be cutting costs in 2022, but it’s a bit of a surprise that its Reality Labs division would be the one facing the change. The metaverse has been the company’s major marketing push this year, with the first physical store also opening up for its hardware products.
But the reality of development seems to be entering the thoughts of executives. The metaverse is a young space, with little to show in terms of widespread acceptance. NFTs, which are a more well-known phenomenon, are also in their nascence. Meta has been working on integrating NFTs into Instagram, which may have more immediate success.
The Reality Labs division has been known to be burning billions of dollars for its metaverse projects. This is unsustainable for a company, however large it is, when the actual capabilities of the metaverse are still fairly limited. Some people in the crypto space have said the metaverse is fake and that it does not exist.
Meta recently released its quarterly report, and it showcased some positive numbers. During the earnings call, CEO Mark Zuckerberg said that Meta was planning to slow down the pace on long-term investments, which include Reality Labs, artificial intelligence, and its business platform.
But it’s clear why so many companies are clamoring to succeed in the metaverse. The metaverse market is expected to be worth $678 billion by 2030, and there is a lot of business to be found in it.
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