The Metaverse division lost another US$4 billion in a single quarter, with a cumulative loss of US$80 billion.

According to news on April 30, while Meta is fully investing in the artificial intelligence track, the Metaverse business, which Meta had high hopes for, is still mired in losses. The company's financial report released on Wednesday showed that its "RealityLabs" (RealityLabs), which is responsible for the research and development of virtual reality (VR), augmented reality (AR) and wearable devices, achieved revenue of US$402 million in the first quarter, lower than Wall Street's expectations of US$488.8 million; operating losses for the quarter reached US$4.03 billion, narrower than the US$4.82 billion loss analysts had expected.

Since the end of 2020, the sector’s cumulative losses have exceeded the US$80 billion mark. In 2021, company founder Mark Zuckerberg once asserted that human work and entertainment will inevitably migrate to the virtual world. To this end, he even changed the company's name from Facebook to Meta. However, this gamble is now facing a severe test.

However, since the rapid rise of generative AI technology at the end of 2022, the direction of industry technology evolution has changed. In order to cope with competition from organizations such as OpenAI, Anthropic and Google, Meta is currently significantly increasing capital expenditures. The company not only invests heavily in underlying computing infrastructure, but also comprehensively accelerates the research and development of a new generation of large models and services.

The sudden shift in strategic focus directly triggered personnel turmoil in the reality laboratory. On the one hand, the Ray-Ban smart glasses jointly launched by Meta and Essilor Luxottica unexpectedly became popular, allowing the company to see new growth points; on the other hand, Meta took advantage of the trend to adjust its research and development direction, diverting resources from the traditional VR field and fully tilting it towards AI-driven wearable hardware. Affected by this business adjustment, Reality Lab laid off about 1,000 employees in January this year.

This "downsizing" campaign continues to spread. In March this year, Meta launched a new round of layoffs, affecting hundreds of employees in multiple core departments such as the Reality Lab, Facebook main site, global operations, recruitment and sales.

Not only that, Meta further disclosed a more radical cost reduction plan last week: the company is expected to lay off about 10% of its employees (about 8,000 people) and simultaneously freeze recruitment for up to 6,000 vacant positions.