Meta's Zuckerberg to Slash Metaverse Spending, Rethink Virtual Reality Future

Meta Platforms Inc. CEO Mark Zuckerberg is expected to implement significant cuts to the company's metaverse efforts, a move that could impact the virtual worlds product Meta Horizon Worlds and its Quest virtual reality unit. According to people familiar with the talks, who asked not to be named while discussing private company plans, executives are considering potential budget cuts as high as 30 percent for the metaverse group next year. Cuts that high would most likely include layoffs as early as January, though a final decision has not yet been made. Meta confirmed a reduction in resources for the metaverse, stating that savings are expected to funnel toward other futuristic projects within the company's Reality Labs division, including AI glasses and other wearables. In a statement, a spokesperson said, "Within our overall Reality Labs portfolio we are shifting some of our investment from Metaverse toward AI glasses and wearables given the momentum there. We arent planning any broader changes than that." The proposed metaverse cuts are part of the company's broader effort to realign its resources and focus on areas with greater potential for growth and innovation. The metaverse, a term coined by science fiction author Neal Stephenson, refers to a hypothetical future version of the internet that is fully immersive and interactive. Zuckerberg has long been a proponent of the metaverse, envisioning it as the future of the company and the reason for changing its name from Facebook Inc. to Meta Platforms Inc. However, the metaverse has faced significant challenges, including high development costs and a lack of clear use cases. Industry experts say that the proposed cuts are a sign of the metaverse's struggles to gain traction. "The metaverse has been a costly and ambitious effort for Meta, and it's clear that the company is reevaluating its priorities," said Dan Ives, a technology analyst at Wedbush Securities. "While the metaverse has potential, it's not yet clear whether it will be a viable platform for mainstream adoption." The cuts are also likely to have implications for the company's workforce. Meta has already announced plans to lay off thousands of employees in recent months, and the proposed metaverse cuts could lead to further job losses. The company's Reality Labs division, which includes the metaverse and AI glasses projects, has been a major driver of innovation and growth for Meta in recent years. As the company continues to navigate the challenges of the metaverse, it remains to be seen how the proposed cuts will impact the project's development and timeline. Meta has not provided a specific timeline for the cuts, but it is expected to make a final decision in the coming weeks.