Report: Meta to Lay Off Employees in Reality Labs Division

In a move that could hinder Meta’s metaverse ambitions, the parent company of Facebook is reportedly planning to lay off employees in its Reality Labs division on Wednesday (Oct. 4).

The specific unit expected to be affected by the layoffs — the Facebook Agile Silicon Team (FAST) — is responsible for developing custom chips for Meta’s devices, Reuters reported Tuesday (Oct. 3), citing unnamed sources.

Meta did not immediately reply to PYMNTS’ request for comment.

The decision comes as Meta faces challenges in producing chips that can compete with external providers, according to the report. In order to equip its devices with efficient custom silicon, Meta has turned to chipmaker Qualcomm. However, this move may impact Meta CEO Mark Zuckerberg’s vision of building groundbreaking augmented reality (AR) glasses that enable access to the metaverse.

The restructuring of FAST has been anticipated since Meta hired a new executive earlier this year to lead the unit, the report said. Additionally, Meta’s separate chip-making unit focused on artificial intelligence (AI) work has also faced challenges, with the executive overseeing that unit recently announcing her departure. Meta, however, has appointed someone else to continue the AI efforts.

Despite these setbacks, Meta continues to innovate in the mixed reality space, per the report. The company recently announced new versions of its smart glasses and consumer-oriented Quest headset. In addition, Meta is developing advanced and sleek AR glasses that resemble regular eyewear, along with associated smart watches, expected to be completed next year.

Nevertheless, the layoffs in the silicon unit are part of Meta’s broader efforts to address concerns about waning revenue growth and optimize its operations, according to the report. The company has already cut around 21,000 jobs since November 2022. These cost-cutting measures aim to reassure investors.

Zuckerberg said in July that Meta remains “fully committed” to its metaverse vision.

“There are 1 billion or 2 billion people who have glasses today. I think in the future, they’re all going to be smart glasses,” Zuckerberg said.

The Reality Labs unit, home to the metaverse project, took in $2 billion while losing $13.7 billion in 2022, PYMNTS reported at the time. The year before, losses came to $10.2 billion, with revenues of $2.3 billion.