Mark Zuckerberg has confirmed plans to shrink Meta’s business and let go of 11,000 employees, following terrible losses they revealed in their 3rd quarter financial reports.
In the letter, Mark confirmed that layoffs would be coming across the board, including the Family of Apps (Facebook, Instagram) and Reality Labs, the division working on their VR and metaverse projects.
Two weeks ago, Meta revealed they had a second consecutive quarterly loss, and expected to lose even more money in the next one. This created a backlash that wiped even more value from their stock.
Reality Labs is not exactly blameless in this situation. The division, which includes their VR headset business, lost $ 9.4 billion in total for the year. This quarter, the same VR business only made $ 285 million, which was a monumental drop of nearly half compared to the year before. Its losses made up $ 3.67 billion in total this quarter, also an increase from the $ 2.63 billion in losses in the previous quarter.
Thankfully, Mark confirmed that he would take steps to take care of his employees, and also taking accountability, partly by making the changes needed to shrink Meta’s business as a whole.
The news is a massive hit, not just to the company and its employees, but 2022’s social media landscape. While not the only company struggling with the uncertainties of the global economy, Meta has done poorly in managing where their money would be invested, and subsequently they’re facing staggering losses for the first time for the company. As the biggest company in the business, running two of the biggest social networks in Facebook and Instagram, this could cause ripples in social media as a business.
Subsequently, this can have serious consequences for the virtual reality industry. Just last month, Meta unveiled and released the Meta Quest Pro, a significant revision on what was originally called the Oculus Quest, that includes design revisions and new technologies like high resolution sensors, LCD displays, eye tracking and Natural Facial Expressions.
Sony also recently revealed details for their PlayStation VR 2. Sony is selling their new VR experience with its ‘Sense Technology’, using many of the technology that is already present in their DualSense controllers. That means adaptive triggers and haptic feedback join the eye tracking and 3D audio technology that are already standard for VR headsets.
Both VR headsets are considerably more expensive, and coming to release at a time when even their already niche audience may not be as willing to spend. The VR business has seemingly been propped up in the past few years by the potential to go mainstream, but it had yet to be adopted enough to the degree that the price could go down and accessibility could increase. Now, it is considerably less likely to see that happening. Furthermore, these businesses could become huge liabilities for their companies, if they continue to lose money. It already is a liability for Facebook, to the tune of $ 9 billion. Unfortunately, VR faces an uncertain future following this news.
