Meta could axe up to one-third of its ‘metaverse’ budget next year

Meta may slash its budget for metaverse projects by up to 30 percent next year, according to a report from Bloomberg. Sources tell the outlet the potential cuts haven’t been finalized, but they would impact the unit that works on Meta’s Quest virtual reality headsets, along with its social platform Horizon Worlds.

Meta, which changed its name from Facebook to align itself with the metaverse, has poured billions into building out its vision for virtual worlds over the past few years. But CEO Mark Zuckerberg has since shifted the company’s focus to developing AI superintelligence with a series of high-profile hires. It most recently added former Apple UI designer Alan Dye to its team, who will oversee the design of “hardware, software and AI integration for its interfaces.”

Zuckerberg asked Meta executives to “look for 10% cuts across the board” as part of its annual budget planning process, according to Bloomberg. However, the outlet reports that Zuckerberg asked the metaverse division, which exists within Meta’s Reality Labs, to slash expenses even more, “given that Meta has not seen the level of industry-wide competition over the technology that it once expected.” As part of the potential cuts, Meta could reportedly begin laying off metaverse staff as early as January.

Reality Labs has lost over $70 billion since the beginning of 2021, Bloomberg reports, with Meta’s most recent earnings report revealing that the division continues to bleed cash.