Meta Platforms Inc. has begun cutting more than 1,000 jobs from its Reality Labs division as the company redirects resources from virtual reality and metaverse products toward AI wearables and mobile phone features. The layoffs represent a significant strategic shift for the social media giant, which has invested heavily in futuristic technologies with limited commercial success.

Job Cuts Impact Reality Labs Division

Affected employees received notifications starting Tuesday morning, according to an internal memo from Chief Technology Officer Andrew Bosworth reviewed by Bloomberg News. The cuts are expected to impact roughly 10% of employees within the Reality Labs group.

Strategic Pivot Toward AI Wearables

As part of the reduction, Meta is pivoting its metaverse efforts to focus on mobile devices while cutting back on virtual reality investments to make the business "more sustainable," according to Bosworth's memo. A company spokesperson confirmed the strategic shift, stating: "We said last month that we were 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."

Reality Labs houses Meta's hardware and futuristic product development efforts, including VR headsets, AI glasses, and virtual world products. However, the division has accumulated losses exceeding $70.00 billion since the start of 2021, as many investments have yet to generate meaningful revenue.

Metaverse Vision Falls Short of Expectations

The metaverse concept—a virtual world where people can work, play, and exercise—has proven particularly costly for Meta. The company invested heavily in developing high-end VR headsets and digital features like avatars, anticipating intense competition with other technology firms. However, that rivalry never materialized, and the metaverse failed to gain traction as envisioned by CEO Mark Zuckerberg when he renamed Facebook to Meta in 2021.

In December, top executives discussed budget cuts as deep as 30% for the metaverse group, aiming to adjust budgets and redirect funding toward other projects, particularly AI glasses.

Focus on Mobile and AI Partnerships

Meta has partnered with EssilorLuxottica SA to develop AI-powered spectacles under brands like Ray-Ban and Oakley. Zuckerberg has indicated these glasses are performing better than expected and remain central to plans for increasing adoption of Meta's AI assistant.

The company will continue metaverse development but with a mobile-first approach rather than the fully immersive VR headsets originally envisioned. The team building metaverse software experiences, now called Horizon, will "double down on bringing the best Horizon experiences and AI creator tools to mobile," Bosworth wrote, citing the "larger potential user base and fastest growth rate" of mobile platforms.

Leaner VR Operations Moving Forward

While Meta will maintain VR headset investments, the approach will be less aggressive. "Starting today, VR will operate as a leaner, flatter organization with a more focused road map to maximize long-term sustainability," Bosworth stated in his memo.

The restructuring reflects Meta's broader effort to balance ambitious technological investments with financial sustainability as the company adapts to market realities and investor expectations.

Source: https://www.ndtvprofit.com/business/layoffs-meta-begins-job-cuts-as-it-shifts-from-metaverse-to-ai-devices

Meta Platforms has appointed Dina Powell McCormick as its president and vice chairman, marking a significant strategic move to strengthen the company's lobbying efforts in Washington. The appointment of the former Trump administration official represents Meta's continued alignment with the current political landscape as the company accelerates its artificial intelligence investments.

Strategic Leadership Appointment

Powell McCormick brings extensive experience from both government and private sector roles to her new position at Meta. Her background spans 16 years in senior leadership roles at Goldman Sachs and key government positions during two presidential administrations.

President Trump congratulated Powell McCormick on her appointment through his Truth Social account, describing her as a "fantastic, and very talented, person" who served his administration with "strength and distinction."

Meta's Strategic Realignment

The appointment continues Meta's series of changes designed to align more closely with the Trump administration. CEO Mark Zuckerberg has been actively seeking Trump's support for building data centers and energy capacity to support the company's frontier AI and personal superintelligence projects.

Recent strategic moves by Meta include:

• Scrapping its US fact-checking programme
• Elevating Republican Joel Kaplan as chief global affairs officer
• Ending diversity programmes
• Hiring former Trump trade adviser C.J. Mahoney to lead the legal team

Investment Focus and Responsibilities

Powell McCormick's role will center on expanding Meta's infrastructure capabilities and investment capacity. According to the company statement, she will help Meta expand its data centers, build new strategic capital partnerships, and increase the company's long-term investment capacity.

The appointment comes as Meta commits substantial resources to artificial intelligence development, with up to $72 billion allocated for capital spending in 2025. The company has been working to maintain competitiveness in Silicon Valley's AI race following mixed reception of its Llama 4 model.

Political and Ethical Considerations

Powell McCormick's husband, US Senator David McCormick, chairs the Senate subcommittee responsible for energy policy, an area directly relevant to her new role at Meta. His spokesperson confirmed that the senator will "continue to comply with all US Senate ethics rules."

The Tech Oversight Project has called for Senator McCormick to recuse himself from votes or committee actions involving Meta's business. Powell McCormick resigned from Meta's board in December, just eight months after joining, before accepting this executive position.

Her role draws comparisons to former Chief Operating Officer Sheryl Sandberg, who leveraged connections to the Washington establishment and Democratic Party to help Meta navigate regulatory scrutiny during her tenure.