Meta’s Reality Labs layoffs show the harsh pivot from virtual reality to AI

For a company that rebranded towards creating a virtual reality metaverse, Meta Platforms is certainly taking a sharp pivot towards the apparent next big thing: artificial intelligence.

The company laid off 10% of its Reality Labs division — about 1,000 jobs according to CNBC or 1,500 jobs if you read the Wall Street Journal — earlier in January, with VR games studios Twisted Pixel, Armature Studio, and Sanzaru closed. Its VR game platform Horizon Worlds still runs, but at a diminished level from the heightened layoff activity.

An IGN report confirming Meta’s VR game studios layoffs said that the company was “shifting some of our investment from Metaverse toward Wearables. This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year.”

While it isn’t abandoning its namesake — CNBC said the company was apparently looking to get developers who makes games on Roblox to build things for Horizon Worlds — it seems the wearables it’s really looking forward to push in the future are AI glasses rather than VR tech.

Meta ‘right-sizing’ VR investments

CNBC, in a January 24 report, also mentioned that VR developers were worried Mark Zuckerberg’s pivot would cause a “VR winter” or the coming death of VR.

While the chips may be down for VR, Meta chief technology officer Andrew Bosworth says such isn’t the case.

Speaking with Alex Heath of tech newsletter Sources at the World Economic Forum at Davos, Switzerland Bosworth said, “We’re still continuing to invest heavily in this space, but obviously, VR is growing less quickly than we hoped.”

He added that as a result, “you want to make sure that your investment is right-sized.”

Speaking with Axios correspondent Ina Fried, Bosworth said Meta was seeing “tremendous growth of our metaverse on mobile.” Bosworth added that a pivot by the company to cater to the mobile market was “going really well, and so you kinda wanna double down on that.”

Meanwhile, Oculus cofounder Palmer Luckey wrote on X that Meta still employs the largest VR team in the world “by about an order of magnitude.”

He added that, while the layoffs were bad and he feels bad for those impacted by those layoffs, the changes at Reality Labs and the VR industry as a whole could be seen as “a good thing for the long-term health of the industry, especially the ongoing incentives.”

A ‘Winter of VR’ is a scary time

According to CNN, citing the US Bureau of Labor Statistics, the US is suffering one of the weakest years of job gains in decades.

Outside of recession years, this is apparently the weakest annual job growth seen in the US since 2003.

For all this talk of rightsizing investments and talking about the long-term health of the industry, the people affected by layoffs and rightsizing by Meta are emblematic of the problems with tech labor in this day and age.

The pivot to AI is causing a harsh winter for many figuratively as it’s happening in the very literal sense in the US as well. – Rappler.com