Meta extinguishes the dream of the metaverse: More than 1500 people were fired

A failed bet weighing 77 billion dollars

The decision on mass layoffs, affecting approximately ten percent of Reality Labs employees, came as an inevitable consequence of the financial disaster. Since its inception in 2020, this division responsible for the development of virtual and augmented reality has recorded cumulative losses that exceed a staggering 77 billion US dollars.

Despiteč Although sales in 2024 were boosted by the popular Ray-Ban Meta sunglasses, the division remains deeply unprofitable, with an operating loss of $17.7 billion in that year alone. Mark Zuckerberg’s ambitious vision of interconnected virtual worlds simply did not materialize. Despiteč billions invested in the development of hardware like Quest VR glasses and platforms like Horizon Worlds, users have never embraced the concept to the extent that would justify such investments.

Analysts evaluated the move to shut down the project as “smart, but late”, especially since Zuckerberg himself began to distance himself from mentioning the metaverse in financial reports as early as 2023, as it became clear that the entire project was collapsing.

A strategic turn towards artificial intelligence

As one door closes, another opens wide. It is now focusing all its resources and hopes on the race for dominance in the field of artificial intelligence (AI). The company is redirecting the funds saved by the cuts to the development of AI products, with a special emphasis on wearable devices such as smart glasses.

“We said last month that we were shifting some of our investment away from the metaverse and into wearables,” a Meta spokesperson confirmed to The Wall Street Journal. “This is part of that effort.”

This strategic turn was prompted by the increased competition on the market, where companies such as OpenAI, Google and Microsoft increasingly they set high standards. Meta is planning huge investments in AI infrastructure, which includes the construction of massive data centers that would consume energy equivalent to that of several large cities. They make it clear that the battle for supremacy in artificial intelligence is now an absolute priority, even if it means sacrificing the main vision of the company until recently.

Reorganization, layoffs and a new vision for Horizon

The restructuring hit hardest the teams working on virtual reality hardware and social platforms within the metaverse. In addition to laying off more than 1,500 employees, the company also shut down three well-known VR game development studios: Armature Studio, Twisted Pixel, and Sanzaru Games. Supernatural, a popular fitness app in virtual reality that Meta bought for $400 million in 2023, has also been put into “maintenance mode,” which means that a minimal number of people will remain on it and will not receive new content.

The fate of the metaverse’s main platform, Horizon Worlds, is also changing. Although the platform will not be completely shut down, Meta is trying to reshape it along the lines of the extremely popular Roblox, with the aim of attracting a younger audience. The company is now encouraging developers to create simpler, kid-friendly games, hoping that Horizon Worlds could become a hit on smartphones and thus attract users to Meta’s services. On the other hand, the platform for virtual business collaboration, Horizon Workrooms, will be completely discontinued, and sales of commercial Quest headsets and business software will cease until the end of February.

For thousands of employees who have been working for years on “building the future”, this turn represents a painful landing and facing the difficult reality of the labor market. A dream about the metaverse, someoneć a central part of Meta’s vision, dissolved under the burden of financial losses and changing technological priorities.