Meta Platforms Inc. has started eliminating more than 1,000 positions within its Reality Labs division. The company is moving resources away from virtual reality and metaverse products toward AI wearables and phone features.
Since 2021, Meta has invested tens of billions of dollars into its metaverse initiative. The effort has failed to gain significant user adoption. Reality Labs reported a loss of $4.4 billion in the third quarter alone.
CEO Mark Zuckerberg had previously called the metaverse "the next chapter of the internet." The push has been notably costly for the firm.
In 2022, Meta launched tools for NFTs on Instagram and Facebook, supporting blockchains like Ethereum, Polygon, and Flow. The company said this would help artists and the creator economy. As crypto markets declined in 2022, interest in NFTs faded. Meta ended all NFT projects by March 2023.
By 2025, the company's focus shifted decisively to generative AI and consumer AI products.
Bloomberg reports the layoffs will affect about 10% of Reality Labs' roughly 15,000 employees. Chief technology officer Andrew Bosworth stated in an internal memo that Meta will refocus metaverse work on mobile platforms and reduce virtual reality investments for sustainability. Affected employees will be notified starting Tuesday morning.
Following the news, crypto tokens linked to metaverse platforms dropped. Render, the largest such token with a $1.15 billion market cap, fell 7.96% to $2.21. Sandbox declined 2.43% to $0.1243, and Decentraland dropped 1.97% to $0.1478. Stacks fell 3.12% to $0.3787, and Virtuals Protocol was down 5.51% to $1.01. The total market capitalization of metaverse tokens stood at $5.74 billion, down 4.11% in 24 hours.