Meta Lays Off Metaverse Staff: Is The Virtual Future A Thing Of The Past?

It has been just over four years since Facebook decided to rebrand itself as Meta, making a public bet on how central the metaverse will be to the tech of the future.

But now, it looks like the company is course correcting, as it lays off more than 1,000 people within its Reality Labs division.

Reality Labs is responsible for Meta’s VR and metaverse tech. And whilst the metaverse was viewed as the ‘next big thing’ back in 2021, it never really took off. But why?

What Is The Metaverse?

Let’s start with the basics: what actually is the metaverse? Well, think of it as an online world where people can interact with virtual avatars, build virtual spaces and share experiences online. In theory, these spaces are meant to help people collaborate more easily, even if they aren’t in the same physical place.

And whilst the idea itself has been a feature of sci-fi books and online games for a while, it really gained traction in late 2020 and 2021, where the metaverse was quickly considered the next big thing in tech.

But now, as Meta lays off many of its staff working on the metaverse, it shows just how quickly priorities have changed.

Why Was The Metaverse So Popular?

The metaverse became popular mainly because of timing. The COVID-19 pandemic made the idea of remote work more mainstream, alongside digital entertainment and online socialising. This social shift meant that the idea of virtual worlds being central to how we live seemed plausible.

No company doubled down more on this idea than Facebook, who announced in October 2021 that they were renaming the company Meta Platforms. At the time, Mark Zuckerberg was convinced that the future of work and play was virtual, and he poured billions of dollars into Reality Labs.

This triggered a huge rush of excitement. Investment piled into the sector, other big tech companies rushed to hire the best talent and brands experimented with virtual engagement tactics. For a while, it really felt like the metaverse was going to totally revolutionise the internet.

Reality Labs Suffered Big Losses

But many quickly realised that the reality of the hype never matched expectations.

Since late 2020, Meta’s Reality Labs division has recorded more than $70 billion in cumulative losses. In its most recent quarterly report in November, the unit posted a $4.4 billion loss and just $470 million in sales. (CNBC).

Horizon Worlds, Meta’s virtual community universe, also landed in criticism due to its low quality graphics and lack of users. To put this into perspective, Horizon Worlds reports a few hundred thousand monthly users, whereas Roblox has around 150 million users daily.

Meta’s Latest Round Of Layoffs

As part of this latest round of layoffs, Meta is shutting down some of its VR gaming studios, namely Armature Studio, Twisted Pixel and Sanzaru, as well as a technical unit known as Oculus Studios Central Technology.

According to CNBC, the layoffs are part of a wider plan to focus on wearables instead. “This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year,” a Meta spokesperson said.

From Metaverse To AI Wearables

Whilst Meta is pulling back on its VR investment, it’s still looking to invest in hardware. The company has seen success with its AI-powered smart glasses, especially those in collaboration with Ray-Ban.

Now, instead of using these wearables as a way into virtual worlds, Meta is positioning them as an addition to the real-world – powered by AI. This, it believes, may be the next step beyond smartphones, as tech and AI become more embedded in our everyday lives.

The End Of The Metaverse? Or Just A Reset?

Whilst many are convinced that the metaverse is ‘dead’, Meta looks like it isn’t giving up on the entire entirely, just shifting focus.

Instead of building a digital world, Meta is looking at where demand is: wearables, AI and gaming.

So, just 4 years after changing its name, Meta hasn’t given up on the metaverse entirely, it’s just changing course.