Meta Platforms Inc. (META) announced it is cutting more than 1,000 jobs within its Reality Labs division. This group is the part of the company that works on futuristic tech like virtual reality and the metaverse. The layoffs will affect about 10% of the 15,000 people working in that unit. This move signals a major change in how the company plans to spend its money, moving away from expensive headsets and toward devices people can wear every day.
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Meta Moves Away from the Metaverse
For a long time, Mark Zuckerberg wanted to build a virtual world called the metaverse. He even changed the company name from Facebook to Meta to show how much he believed in it. However, this project has been very expensive and has not made much money yet. Because of this, the company is now making the metaverse team leaner and smaller. Instead of trying to get everyone to wear big virtual reality (VR) headsets, Meta will now focus on bringing these virtual experiences to mobile phones, where it is easier to find new users.
Meta’s New Focus Is on AI Glasses and Wearables
Meta is now betting its future on Artificial Intelligence and wearables, which are gadgets like smart glasses. The company says its AI-powered glasses, made with partners like Ray-Ban and EssilorLuxottica (EL), are selling much better than they expected. By cutting jobs in the VR department, Meta can take that saved money and put it into making better AI assistants for your glasses. The goal is to create devices that feel natural to wear while giving people easy access to AI tools throughout the day.
Meta Is Faced with the Financial Reality of Reality Labs
The reason for these cuts is mostly about the math. Since the start of 2021, Reality Labs has lost a staggering $70 billion. Investors have been asking the company to be more careful with its spending. By shifting toward mobile phones and AI glasses, Meta hopes to create products that people actually want to buy right now. While the company is not giving up on virtual reality entirely, it is no longer the main priority. The new plan is to build a business that can last a long time without losing billions of dollars every year.
Is Meta Stock a Good Stock to Buy Now?
On TipRanks, META stock has a Strong Buy consensus rating based on 37 Buys, six Holds, and one Sell rating. Also, the average Meta Platforms price target of $824.98 implies 28.5% upside potential from current levels. Year-to-date, META stock has fallen 2.75%.
