Meta to Cut Staff in Metaverse Silicon Valley Unit

Meta to Cut Staff in Metaverse Silicon Unit: Report
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Meta, the parent company of Facebook, is gearing up for staff reductions within its Reality Labs division, a crucial driver of its metaverse initiatives. Employees received notifications about the impending layoffs via an internal post on Meta’s discussion forum.

According to Reuters, citing sources familiar with the matter, the layoffs are expected to primarily affect the Facebook Agile Silicon Team (FAST), a silicon unit employing around 600 people. This move could potentially impact Meta’s ambitious augmented and virtual reality (AR/VR) plans, which are pivotal to Mark Zuckerberg’s vision.

Meta Faces Challenges in Chip Production

Despite the Zuckerberg-led tech giant’s commitment to invest $10 billion in its metaverse endeavors, the company has faced challenges in producing chips for its AR/VR headsets that can compete with third-party providers.

In 2022, Meta’s Reality Labs division reported staggering operating losses of $13.7 billion, which hindered their AR/VR and metaverse ambitions. Reduced sales of Quest 2 in 2022’s Q4 were a primary contributor to declining revenue.

Meta Faces Challenges in Chip Production

Moreover, internal documents have reportedly revealed technical glitches, lackluster user interest, and a lack of clarity about the path to success for the metaverse project, which raises concerns about its viability.

Continued Workforce Streamlining for Metaverse

Meta has been streamlining its workforce and has already eliminated approximately 21,000 jobs across various sectors in the past year.

In late September, Meta introduced its latest mixed reality (MR) headset, the Quest 3, boasting improved visual resolution and audio range compared to its predecessor, the Quest 2.

Reality Labs’ revenue performance is concerning, with Q2 2023 generating $276 million, nearly a 40% drop from the same quarter in 2022. This represents the lowest revenue for Reality Labs in two years.

Several factors contribute to Reality Labs’ poor revenue performance, including the early stage of metaverse development and the relatively high cost of Meta’s metaverse hardware, such as the Quest VR headset.

Despite these challenges, Mark Zuckerberg and his company remain committed to their metaverse vision. The company believes that the metaverse will be a major computing platform in the future. Meta is investing in developing new metaverse applications and services while working to make its metaverse hardware more affordable.


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