Look, I could also be one of many few holdouts who nonetheless thinks that Meta’s metaverse idea isn’t lifeless, and that the corporate stays centered on bringing its VR social worlds to fruition for the subsequent technology, even when it’s not discussing these plans publicly in the mean time.
However Meta’s personal cost-cutting efforts don’t help that, with the corporate informing employees that it’s reducing one other 10% of workers from its Actuality Labs division, the division that’s headed by long-time Meta government Andrew Bosworth, and oversees improvement of its Quest VR headsets and AI glasses units, amongst different parts.
As reported by The New York Instances, Meta is making the cuts with the intention to improve its give attention to AI, versus its metaverse mission.
As per NYT:
“The cuts to Actuality Labs – which has roughly 15,000 workers – may very well be introduced as quickly as Tuesday. The layoffs could be a fraction of Meta’s complete workforce of 78,000, however are set to disproportionately have an effect on these within the metaverse unit who work on digital actuality headsets and a VR-based social community, stated the folks, who requested to not be named since they weren’t licensed to debate confidential selections. The cuts might find yourself affecting greater than 10 p.c of the division, one of many folks stated.”
Enterprise Insider reported final week that Bosworth has referred to as an pressing employees assembly for this Tuesday, by which he’s anticipated to format the corporate’s imaginative and prescient for Actuality Labs transferring ahead, which clearly pertains to this staffing re-assessment.
So what’s occurring? Is Meta really giving up on VR, and/or the metaverse extra broadly?
I’d say no, however with a lot now being invested into AI improvement, Meta’s clearly re-thinking its path ahead, and the way it can make the most of its AI methods to energy the subsequent stage.
I believe that is perhaps the important thing perpetrator, that Meta more and more believes that it will probably exchange vital numbers of engineering and improvement employees with AI instruments as an alternative, which is strictly what Meta CEO Mark Zuckerberg stated when interviewed about this final January.
Throughout an look on the Joe Rogan podcast, Zuckerberg mentioned the fast improvement of AI methods, and famous that:
“Most likely in 2025, we at Meta, in addition to the opposite firms which might be principally engaged on this, are going to have an AI that may successfully be a form of midlevel engineer that you’ve at your organization that may write code.”
That is particularly related for VR improvement, with AI methods now enabling simplified VR object and surroundings creation primarily based on conversational prompts.
So whereas this may occasionally seem to be a big staffing discount, which factors to a re-assessment of its metaverse ambitions, it may very well be that Meta merely believes that it will probably exchange employees with AI in no less than a portion of those roles.
However then once more, Actuality Labs continues to be working at a big loss, and this may be a easy rationalization primarily based on market demand.
Actuality Labs has price Meta over $70 billion in improvement over the previous six years, and that’s accounting for the income advantages of elevated curiosity in AI glasses and cumulative gross sales of VR headsets.
And demand for each is rising, slowly, however certainly. Actuality Labs grew its gross sales by 40% in 2024, with the reputation of its Ray Ban Meta glasses serving to to drive adoption of its superior merchandise.
So, there’s curiosity there. However while you’re speaking billions, and Meta’s concurrently sinking lots of of billions within the improvement of AI knowledge facilities, there’s going to be some degree of price crunch, which, on this occasion no less than, appears to have hit Actuality Labs.
Although once more, I do assume that that is Meta dogfooding its personal AI instruments, and reinforcing its personal perception in what AI fashions can obtain.
Zuck is all in on the potential of AI, which continues to be in its early phases, and I’d wager that Meta’s planning to scale back employees over time, because it continues to extend its AI capability.
This will likely be a technique that helps to offset these large improvement prices, and reinforce Zuckerberg’s perception that AI is the longer term.
Will that find yourself paying off? Nicely, at these ranges of funding, it’s going to take Meta a very long time to cowl the prices, earlier than it even thinks about making a revenue.
However in Zuck we (or they) belief.
