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Exclusive: Facebook-owner Meta tells hardware staffers to prepare for cutbacks

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Small figurines are seen in front of the Meta logo displayed in this illustration taken February 11, 2022. REUTERS/Dado Ruvic/Illustration

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May 11 (Reuters) – Facebook owner Meta Platforms Inc (FB.O) is preparing cuts to its Reality Labs division, a unit at the center of the company’s strategy to refocus on hardware products and the “metaverse,” a spokesperson confirmed to Reuters on Wednesday.

Chief Technology Officer Andrew Bosworth told Reality Labs staffers during a weekly Q&A session on Tuesday that the changes would be announced within a week, according to a summary of his comments viewed by Reuters.

Meta’s spokesperson confirmed that Bosworth told staffers that the division could no longer afford to do some projects and would have to postpone others, without specifying which projects would be affected.

She said Meta does not anticipate layoffs as part of the changes.

Last month, the world’s biggest social media company told investors it would cut costs in 2022, following a drop in Facebook user numbers earlier this year that sent the title. Read more

In an earnings call in late April, chief executive Mark Zuckerberg said Meta plans to “slow down the pace” of some longer-term investments in areas like its business platform, intelligence infrastructure Artificial and Reality Labs.

Meta lowered its total planned spending for 2022 to between $87 billion and $92 billion, down from its earlier guidance of between $90 billion and $95 billion. Last week, he told employees he was cutting hiring for most mid- to senior-level positions, as originally reported by Insider.

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The 18-year-old tech giant has invested heavily in Reality Labs, which grew out of its Oculus virtual reality business and now encompasses work in augmented reality, smart glasses, Portal video calling devices and technology solutions. of business.

The unit is also building a mixed reality headset with face and eye tracking called Project Cambria, which Zuckerberg previewed in a post on his Facebook page on Wednesday.

These investments aim to position Meta as a gateway to the Metaverse, a universe of immersive, shared and interconnected digital worlds that Zuckerberg says will be the successor to the mobile internet.

The company changed its name in October to reflect its metaverse goals and has hired many employees for Reality Labs, adding more than 13,000 employees last year and nearly 6,000 in the first quarter of this year.

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At the same time, Zuckerberg warned that it could take around a decade for bets on the metaverse to pay off, and Reality Labs bled money. The unit lost $10.2 billion in 2021 and another $3 billion in the first quarter of this year.

Zuckerberg told investors last month that he still aims over the next few years to generate enough revenue growth from legacy apps Facebook, Instagram and WhatsApp to fund investments in Reality Labs, while continuing to grow profits. generally.

“Unfortunately that won’t happen in 2022,” he said.

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Reporting by Katie Paul; Editing by David Gregorio and Leslie Adler

Our standards: The Thomson Reuters Trust Principles.

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