Meta's Reality Labs division is reportedly set to undergo significant changes, with plans to lay off approximately 10% of its staff, according to a New York Times report. This strategic move comes as the company shifts its focus towards AI and smart glasses, marking a potential departure from its VR and Horizon Worlds endeavors.
The impending layoffs, which could affect more than 10% of the 15,000-person XR division, are expected to impact VR headset developers and those working on a VR-based social network. This development follows an internal meeting called by Meta's CTO, Andrew Bosworth, on January 14th, deemed crucial for the division's annual agenda.
Meta's strategic shift also involves reallocating funds from VR products to its wearables division, which is responsible for the development of smart glasses, including the Ray-Ban Meta and Meta Ray-Ban Display models. This decision comes amidst a two-year reduction in VR spending, with the company scaling back on Quest exclusives and cutting staff across various XR studios, including Oculus Studios and the team behind Supernatural.
The author speculates that the all-hands meeting might reveal restructuring details and morale-boosting statements, emphasizing Meta's commitment to connecting people through technology. However, the author also highlights the financial strain caused by the company's VR and metaverse ambitions, which have yet to turn a profit despite significant operational costs. In contrast, smart glasses have shown promise, with investors recognizing their potential for a substantial return on investment.
The author argues that smart glasses offer a more efficient and cost-effective approach compared to VR headsets, as they don't require extensive developer tools, content creation conventions, or exclusive content funding. The absence of an app store for smart glasses is seen as a temporary measure, as it will be essential for the company's upcoming AR glasses. Despite this, Meta's leadership in smart glasses makes the shift towards VR reduction seem questionable to investors.
