Meta Plans Significant Budget Cuts in Metaverse Division

Meta is reportedly planning to scale back its metaverse spending by up to 30% and redirect the funds into virtual reality glasses and artificial intelligence. No final decision has been made yet, but budget cuts and possible layoffs are on the table for Meta's Reality Labs division, which includes its virtual reality unit that consumes most of the metaverse-related budget.

The budget cuts could take effect as early as January, with the resources being redirected to a Reality Labs unit focused on developing augmented reality glasses. Wall Street reacted positively to this news, with Meta shares initially spiking over 5% when the market opened on Thursday, before settling around the $661 mark to gain 3.4% on the day.

Meta, which rebranded from Facebook in 2021 with aspirations of building a metaverse, has invested billions in virtual reality technology, but interest has waned as tech firms shift focus towards artificial intelligence.

Competition in the metaverse has cooled, as companies like Apple and Google have slowed their efforts in developing competing virtual reality devices. Despite this, other companies, such as the AI startup Infinite Reality, continue to explore metaverse opportunities, including the acquisition of the music service Napster.

Meanwhile, Meta CEO Mark Zuckerberg announced the opening of a new creative studio within Reality Labs, focusing on design, fashion, and technology, emphasizing the potential of AI glasses to enhance human interaction with technology.

He highlighted the importance of creating intuitive experiences centered around people.