Meta Warns Hardware Employees to Brace For Layoffs

A spokeswoman for Meta Platforms Inc confirmed to Reuters on Wednesday that the company's Reality Labs business, which is essential to its strategy to refocus on hardware products and the "metaverse," will be reduced.

According to a summary of his remarks seen by Reuters, Chief Technology Officer Andrew Bosworth told Reality Labs employees during a weekly Q&A session on Tuesday to expect the changes to be announced within a week.

The spokeswoman at Meta acknowledged that Bosworth informed employees that the division could no longer afford to complete certain projects and would have to delay others, without identifying which projects were affected.

She stated that Meta has no plans for layoffs as a result of the changes.

The world's largest social media giant informed investors last month that it would reduce costs in 2022, in response to a dip in Facebook (NASDAQ:FB) users earlier this year that led the price to plummet.

Mark Zuckerberg stated in a late-April earnings call that Meta planned to "lower the pace" of certain long-term investments in areas like its business platform, artificial intelligence infrastructure, and Reality Labs.

Meta reduced its anticipated total expenses for 2022 to between $87 billion and $92 billion, from between $90 billion and $95 billion previously. According to an early report by Insider, the company informed its staff last week that it will reduce hiring for the majority of mid- to senior-level positions.

The 18-year-old internet company has made substantial investments in Reality Labs, which evolved from its Oculus virtual reality business and now includes work on augmented reality, smart glasses, Portal video-calling devices, and workplace IT solutions.

Zuckerberg previewed Project Cambria, a mixed reality headset with face and eye tracking, on Wednesday on his Facebook page.

These investments aim to promote Meta as a portal to the metaverse, a realm of immersive, shared, interconnected digital realities that Zuckerberg hopes will replace the mobile internet.

The corporation changed its name in October to reflect its metaverse ambitions and has employed heavily to staff Reality Labs, adding over 13,000 people last year and roughly 6,000 employees in the first quarter of this year.

Simultaneously, Zuckerberg has stated that it may take almost a decade for the metaverse wagers to pay off, and Reality Labs has been bleeding cash. The division lost an additional $3 billion in the first quarter of this year.

Zuckerberg told investors last month that he still intends to produce sufficient revenue growth from legacy apps Facebook, Instagram, and WhatsApp over the next several years to finance investments in Reality Labs while continuing to boost overall profitability.

"Unfortunately, that will not occur in 2022," he stated.