It seems some projects under Meta's Reality labs division aren't meant to be.
According to a recent report from Reuters, a Meta spokesperson confirmed that the company is preparing cutbacks in its Reality Labs division in the form of axing or postponing some of its projects to refocus on hardware products and the metaverse.
It is unknown which of Reality Labs' projects are canceled or postponed until further notice.
Reality Labs Cutbacks Details
According to Reuters' report, Meta's Chief Technology Officer Andrew Bosworth told the company's Reality Labs division staff during a weekly Q&A session on May 10 to expect announcements regarding changes within the division within a week, according to a summary of Bosworth's comments during the Q&A session.
The Meta spokesperson confirmed that Bosworth told Reality Labs staffers that it could no longer afford to do some projects, while it would have to postpone others. Bosworth told this without specifying which projects were canceled or postponed.
However, one project that Reality Labs is sure to not be canceled nor postponed is Project Cambria, which is Meta's high-end VR headset that is expected to release this fall.
The spokesperson added that Meta is not planning to lay off anyone from Reality Labs as part of the changes, which is something that is either happening or has happened within Meta's many teams and divisions.
Engadget mentioned in its report that the postponement and/or cancelation of some of Reality Labs' projects is the latest blow to Meta's ambitions to re-orient the company towards the metaverse rather than its social network, specifically Facebook and Instagram.
Meta's Investor Woes And Recruitment Freeze
Meta was recently caught in a tight spot; the spending level of company CEO Mark Zuckerberg on the metaverse has worried company investors due to the payout being years away.
This concern is evidenced by Reality labs' increased operating cost from $1.83 billion to $2.96 billion.
Meta's Reality Labs is the division crucial to Meta's ambition to become the gateway into the metaverse.
Other pieces of evidence that worried investors include Meta's stock falling by nearly 50%, negatively offsetting the company's growth in the past five years, and the company's slow growth.
This slow growth, which cost the company $10 billion in lost revenue, is caused by Apple's ad tracking changes and younger users switching from Facebook and/or Instagram to TikTok.
The increased operating cost is negatively affecting Meta so badly, that it was forced to freeze recruitment efforts in early May, with the company's engineering team being the first to be affected by the freeze while Reality Labs was said to be least affected by Meta's many teams and divisions.
Zuckerberg was said to have acknowledged the woes of Meta's investors in a call with them on April 27, saying that investment in the metaverse "differed from past product launches" as virtual reality has a high barrier of entry and that it includes hardware.
He also added that Meta's overall profitability wouldn't grow in 2022 due to the investments made in the metaverse and ad revenue not growing as quickly as initially expected.
