Meta has laid off 1,500 employees, abandoning its VR ambitions for AI, signaling a major shift in its strategy and focus.
Menlo Park: Meta has made big changes. Last week, the company laid off around 1,500 workers from its Reality Labs team. This is about 10% of the staff in that area. Meta is also closing several virtual reality (VR) game studios. Just four years ago, Meta focused heavily on VR, hoping it would change how people connect online.
Many people may not miss the metaverse. In 2021, Facebook even changed its name to Meta. The goal was to attract younger users who enjoy online games like Fortnite and Roblox instead of traditional social media. This move also helped Meta distance itself from negative stories about Facebook, like privacy problems and misinformation.
At first, Meta believed that the metaverse would be the next big platform for socializing and gaming. But now, they are shifting their focus from the metaverse to artificial intelligence (AI). Some VR projects, including game studios like Armature, are being closed. The VR fitness app Supernatural will no longer make new content and will only keep the current one running. Meta’s Workrooms, a program for VR at work, is also shutting down.
Earlier, reports showed that Meta was cutting its VR budget by 30%. Meta has lost a lot of money in its VR division. They have spent around $73 billion without ever making a profit from it. To think about it, you could spend $1 million every day for 200 years and not match that spending!
Failed promises were a big part of the problem. The early metaverse was not good enough for many users. Avatars looked silly, and many features were not appealing. Customers were not truly excited about the technology. Although the Oculus headsets gave Meta a big share of the VR market, sales have dropped. Reports show that VR headset shipments fell by 12% in 2024, and Meta accounted for most of those shipments.
Now, Meta is looking at AI and smart glasses, like the Ray-Ban AR glasses, which are starting to sell better. They have special features like hands-free recording and music streaming. With these changes, it’s clear that VR may no longer be Meta’s focus. Instead, they will invest in products that have more potential, like AI apps and smart glasses.