Meta, the parent company of Facebook, has finally taken the axe to its 'Metaverse' division. This signals a strategic pivot, scaling back its Virtual Reality (VR) business—which has consumed astronomical costs over the years—to concentrate all corporate capabilities on Artificial Intelligence (AI), the hottest topic in the current IT industry.
Approximately 1,500 employees, representing 10% of Meta's metaverse-dedicated division 'Reality Labs,' are set to receive layoff notices this week. According to the New York Times (NYT), the cuts are expected to begin as early as Tuesday.
The primary driver behind this decision is the staggering financial loss. Since its inception in 2020, Reality Labs has recorded a cumulative loss exceeding $70 billion (approx. 92 trillion KRW). Despite continued investment amidst criticism of it being a "money pit," the company seems to have finally hit a wall regarding realistic profitability.
The flow of capital within Meta is undeniably shifting. The slashed metaverse budget is being directly funneled into generative AI development and next-gen wearable devices, such as smart glasses.
While the metaverse was once the biggest buzzword in crypto and tech, the prevailing assessment is that it has failed to achieve mass adoption, with the exception of gaming platforms like Roblox or Fortnite. There have even been shocking reports that Meta's ambitious project, 'Horizon Worlds,' sees fewer than 900 daily active users.
CEO Mark Zuckerberg continues to emphasize that "2025 is a pivotal year for the metaverse," but the company's wallet is already opening decisively toward AI.