Meta is laying off around 700 employees from its Facebook and Reality Labs divisions as part of a strategic transition towards artificial intelligence (AI). This decision, reported by CNBC, emphasizes the company's shift away from its earlier metaverse ambitions, which have not garnered the anticipated consumer interest.
These layoffs come on the heels of a previous reduction in workforce, where about 1,500 employees were let go in January, primarily from Reality Labs, the segment responsible for products like the Quest VR headset and the Horizon Worlds platform. Currently, Meta employs approximately 78,000 individuals.
A spokesperson for Meta stated, “Teams across Meta regularly restructure or implement changes to ensure they’re in the best position to achieve their goals. Where possible, we are finding other opportunities for employees whose positions may be impacted.” This suggests an effort to mitigate the impact on affected employees by exploring other job possibilities within the company.
Meta, previously known as Facebook, rebranded itself in 2021 with a vision of the metaverse as the future of social interaction. However, the concept of needing bulky virtual reality headsets has proven to be a significant barrier for widespread adoption. In contrast, Meta's Ray-Ban smart glasses have seen better sales, likely due to their more conventional appearance.
Since CEO Mark Zuckerberg initiated the company's focus on the metaverse, Reality Labs has incurred losses upwards of $73 billion. Recently, Meta announced plans to discontinue Horizon Worlds but quickly reversed that decision, indicating ongoing uncertainty in its metaverse strategy. Meta's Chief Technology Officer Andrew Bosworth clarified, “We have decided, just today in fact, we will keep Horizon Worlds working in VR for existing games.”
As the company pivots its focus, there are reports suggesting Meta is making significant investments in AI technology. A recent article from the Wall Street Journal mentioned that Zuckerberg is developing a personal AI assistant aimed at enhancing productivity for Meta employees.
In addition to the layoffs and strategic shifts, Meta has faced legal challenges recently. The company suffered two significant court losses: one in New Mexico, where it was found liable for misleading consumers regarding product safety and child safety concerns, resulting in a civil penalty of approximately $375 million, which is notably less than the $2 billion sought by the state. The second legal defeat was related to claims from a woman who alleged that exposure to Instagram during her childhood led to addiction and mental health issues, for which a jury awarded her $3 million.
These two cases are part of a broader scrutiny facing Meta, with around 2,000 other lawsuits pending in federal court regarding issues of child safety and social media addiction.
Looking ahead, further layoffs at Meta may be imminent. A report from Reuters indicated the possibility of cutting 20% or more of its workforce, translating to around 15,000 positions. These layoffs are reportedly aimed at offsetting the high costs associated with AI infrastructure investments and preparing for anticipated efficiency gains from AI advancements.
In response to the Reuters report, Meta characterized the claims as “speculative” and based on “theoretical approaches.” As the company navigates this transition, the future remains uncertain, with both its workforce and strategic direction in flux.
Source: Gizmodo News