Why is Meta cutting its metaverse budget?

Meta is cutting its metaverse budget due to waning investor and consumer interest and to reallocate resources toward AI development.

What is Meta focusing on instead of the metaverse?

Meta is now prioritizing the development of large AI models, chatbots, and AI-driven hardware experiences.

Will there be layoffs at Meta's metaverse division?

Layoffs are reportedly being considered as part of the significant budget cuts planned for Meta's metaverse division, Reality Labs.

Home / Business and Economy / Meta Slashes Metaverse Budget, Bets Big on AI

Meta Slashes Metaverse Budget, Bets Big on AI

4 Dec

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Summary

Meta is planning significant budget cuts for its metaverse division.
Layoffs may occur early next year as part of the planned cuts.
The company is shifting focus towards developing AI models and chatbots.

Meta Slashes Metaverse Budget, Bets Big on AI

Meta is reportedly preparing for significant budget reductions within its metaverse division, Reality Labs, with potential cuts reaching 30 percent. These measures, which could include layoffs as early as next year, reflect a strategic reassessment of the company's virtual world initiatives. Discussions regarding these cuts have reportedly occurred during recent meetings at CEO Mark Zuckerberg's Hawaii compound.

The metaverse division has faced challenges gaining traction with both investors and consumers, who perceive it as a resource drain. Despite CEO Mark Zuckerberg's underlying belief in the future of virtual worlds, these proposed budget cuts indicate a recognition that widespread adoption is still a distant prospect. Zuckerberg has also noticeably reduced public mentions of the metaverse.

Instead of metaverse development, Meta is now channeling resources into advancing large AI models and chatbots. The company is also focusing on hardware products specifically designed for AI experiences. This strategic redirection signals a clear prioritization of artificial intelligence as the company's next major frontier.

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