Meta refocuses on AI hardware as metaverse layoffs begin

As we expected, Meta has begun laying off more than 1,000 employees from its Reality Labs division, which focused on virtual reality and metaverse products, Bloomberg reports. The company will refocus on developing wearables, like its recent batch of AI-powered Ray-Ban smart glasses, according to a memo from CTO Andrew Bosworth.

The news isn’t too surprising. Reality Labs has lost more than $70 billion since the beginning of 2021, and while Meta has done a solid job of delivering desirable consumer VR headsets and smart glasses, that business hasn’t been nearly profitable enough to justify the cost. And of course, Mark Zuckerberg’s huge gamble on the metaverse, which involved renaming the company from Facebook to Meta in 2021, has gone nowhere.

According to Bloomberg, Meta’s metaverse plans will now focus on mobile devices, which could mean a combination of its future wearables as well as existing mobile apps. “With the larger potential user base and the fastest growth rate today, we are shifting teams and resources almost exclusively to mobile to continue to accelerate adoption there,” Bosworth wrote in a memo to staff this morning.

Meta isn’t dumping its VR headset plans entirely, but according to Bosworth the VR divion will “operate as a leaner, flatter organization with a more focused road map to maximize long-term sustainability.” Basically, don’t expect a Quest 3 follow-up anytime soon.