Cold shower for Meta Platforms. Spending without counting to accelerate the maturation of virtual and augmented reality technologies, it’s over. Reuters reports on May 11 that the company is preparing to stop some projects and postpone others within its Reality Labs division, which is at the center of its new mission revolving around the metaverse.
Instagram Facebook is a direct result of the company’s lacklustre financial results, the majority of its revenue comes from its advertising activities linked to the social networks Facebook and Instagram. Taken aback by the explosive popularity of TikTok and put in difficulties by Apple’s new advertising policy on iOS, Meta must tighten its belt to limit breakage… and the discontent of its shareholders.
As a reminder, Meta’s activities around virtual and augmented reality (which include a lot of research and development, but also large-scale hiring and investment in content) accounted for a loss of more than $ 10 billion in 2021, and exceeding three billion dollars in the first quarter of 2022. However, this activity will not be a major source of income until 2030, according to Mark Zuckerberg.
So it was necessary to reduce the wingspan. According to information available to Reuters, details of cancelled or shelved projects will be communicated to Meta teams within seven days. No redundancies are expected to take place, but Meta will also scale back its recruitment ambitions. Its Reality Labs division now employs about 18,000 people, and 10,000 hires under five years had been announced in Europe last year. Meta had announced during its quarterly results that it would cut annual expenses by $3 billion.
However, make no mistake, Meta remains firmly committed to the path of the “metaverse”, or at least on what it perceives as the next great personal computing architecture, after the smartphone. The goal for Meta is to no longer be at the mercy of Apple and Google (who reign undivided on their respective iOS and Android ecosystems), and for now it is leading the race in this still young field. The whole question now is whether he will go the distance.