Meta’s AR/VR hardware teams have been told to cut spending by 20% by 2026, The Information reports.
The report comes from The Information’s Wayne Ma and Kalley Huang, who also today reported Meta’s release timelines for Quest 4 and Quest Pro 2.
David Heaney
Meta has been investing tens of billions of dollars each year in its Reality Labs AR/VR division. Since breaking out Reality Labs’ finances in public filings in Q4 2020 the company has spent over $50 billion on the division. Taking into account the total spending since acquiring Oculus in 2014, that figure could be close to $100 billion.
More than 50% of Reality Labs spending is on the research and development of AR glasses, a product line which Meta has yet to launch. The rest of the spending is on Quest headsets and the Horizon software platform, which are both still relatively early technologies far from maturity.
Reality Labs spending has been increasing every year, but according to The Information’s report Meta executives, including Mark Zuckerberg, now want to start to rein in spending and begin the long path to profitability as the XR sector matures. They reportedly told Reality Labs hardware teams to cut spending by 20% by 2026, with “much of those cuts happening this year”.
The report also claims Reality Labs has undergone restructuring throughout the past year to this effect, eliminating middle and senior management positions including “more than a dozen directors and vice presidents”.
Meta has also moved some Reality Labs teams working on AI into the company’s wider generative AI teams, the report claims, including a 140-person team working on AI speech.
As The Information notes, this is far from a retreat from AR/VR for Meta, and can be seen more as a sign of a transition for Reality Labs from mainly being a research and development division to eventually one day becoming a profitable business. With Quest 3, Meta has already brought some of its computer vision and optical physics research out of the lab and into a product, and with the Quest 4 models and Quest Pro 2 it will likely bring far more.
