Facebook unit Meta is laying off employees across units, including its WhatsApp and Instagram apps and immersive virtual reality (AR/VR) division, the Verge reported on Wednesday, citing people familiar with the matter. The move could hit Mark Zuckerberg’s ambitious foray into the metaverse, enabling users to walk around augmented- and virtual-reality environments.
The reorganization also affects Meta’s silicon unit, which produces the chips that power the company’s augmented and virtual reality headsets. The unit, the Facebook Agile Silicon Team, or FAST, is reportedly losing money. Its losses were more significant than expected in the first quarter of 2023, a sign that the company is struggling to make its AR/VR business profitable.
In a post on the company’s internal discussion forum Workplace, Meta told employees that “a small number of roles were eliminated in FAST to better align with our long-term strategic goals and location strategy.” The post did not disclose how many jobs had been cut.
FAST employs about 600 people. The job cuts will hurt the company’s efforts to build wearables and other hardware that enables users to enter the metaverse. The company plans to invest $10 billion over the next several years. It will also have to rely on third-party companies to produce its silicon, as it cannot manufacture the high-performance components needed for the headsets.
This is not the first time Meta has laid off workers in recent years. It trimmed its workforce by about 11,000 in 2022 as it faced overly optimistic growth projections post-COVID-19 and by another 10,000 in 2023 as part of Zuckerberg’s plan to make 2023 the “Year of Efficiency.” The company has also shut down its headquarters and withdrawn 5,000 open positions since the end of the pandemic.
Several employees, including app reverse engineer Jane Manchun Wong, who was a member of Meta’s Threads, have publicly shared their layoff news. In a post on social media, Wong said she had been let go from the company and appreciated her time at Meta but was excited to be moving on.
A Meta spokesperson told Reuters that a few of its teams were making changes to “align with their long-term strategic goals and location strategy.” He added: “This includes moving some teams to different locations and employees to different roles. In situations like this, when a role is eliminated, we work hard to find other opportunities for impacted employees.”
A source close to the situation told Reuters that Meta was focusing on building products for its core digital advertising business and its growing global audience of 2 billion users. The company’s latest quarterly results showed its ad revenue rose 3%, beating analysts’ expectations of a 2% increase. Prices for online ads increased by 4%, reversing a three-quarter trend of declining prices.
