Meta is laying off about 700 people at Facebook and its VR division reality Labs, according to a new report from CNBC. The layoffs come as Meta seeks to pivot away from its metaverse bet and lean more heavily into AI.
The hundreds of new layoffs come after Meta cut about 1,500 workers in January, mostly from Reality Labs, which makes the Quest VR headset and the Horizon Worlds platform. Meta employs about 78,000 people in total.
“Teams across Meta regularly restructure or implement changes to ensure they’re in the best position to achieve their goals,” a Meta spokesperson told Gizmodo in a statement Wednesday. “Where possible, we are finding other opportunities for employees whose positions may be impacted.”
Facebook was renamed Meta in 2021 because CEO Mark Zuckerberg thought the metaverse was the future. But it turns out that the need to strap a gigantic computer to your face is quite a tall hurdle for mass adoption. Meta’s Ray-Ban glasses, while a different product and use case, have sold much better, perhaps because they look like normal glasses on your face.
Reality Labs has burned through roughly $73 billion since Zuck shifted his company’s focus to the metaverse. Last week Meta announced it was shutting down Horizon Worlds only to backtrack just a couple of days later.
“We have decided, just today in fact, we will keep Horizon Worlds working in VR for existing games,” Meta CTO Andrew Bosworth said in an Instagram AMA last week.
Meta is trying to make a larger push into AI, with a report from the Wall Street Journal recently suggesting Zuckerberg was even creating a personal AI agent that’s supposed to work alongside Meta workers.
Meta suffered two legal defeats in the past two days, the first in New Mexico where the state Attorney General had brought a suit alleging it had misled consumers about the safety of its products and the potential harm to children. Meta has been ordered to pay roughly $375 million in civil penalties in that case, far less than the $2 billion the state had asked for.
The second loss in court happened Wednesday when Meta and Google both lost a case brought by a woman who said she’d become addicted to Instagram and YouTube as a child and had suffered mental health issues as a result. Meta argued that the woman’s mental illnesses predated her exposure to Instagram. The jury has awarded the woman $3 million in that case.
The two cases had been closely watched because there are about 2,000 other cases against Meta pending in federal court around the issues of child safety and social media addiction.
It’s entirely possible that more layoffs at Meta are just over the horizon. Reuters reported last week that Meta would lay off 20% or more of its workforce. That would be somewhere in the neighborhood of about 15,000 people. The reason for the layoffs, according to Reuters, was an attempt to offset “costly artificial intelligence infrastructure bets” and to “prepare” for “greater efficiency” that’s supposed to be realized by AI advancements.
Meta told Gizmodo over email Wednesday that the Reuters report was “speculative” and had “theoretical approaches.”
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