Meta cutting spending in its hardware division and can no longer afford some projects, report says

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Mark Zuckerberg tries on a VR headset at Meta's first store. Facebook/Meta
Mark Zuckerberg tries on a VR headset at Meta's first store. Facebook/Meta
  • Meta's hardware division Reality Labs is scaling back spending, a spokesperson confirmed to Reuters.
  • Reality Labs has generated $6.2 billion in losses in the last two quarters.
  • Meta has also implemented a hiring freeze at Facebook.
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Meta's hardware division Reality Labs is bracing staff for cutbacks, Reuters reported.

Reuters saw a summary of comments made by Meta's chief technology officer, Andrew Bosworth, made to Reality Labs staffers during a weekly Q&A session on Tuesday.

A Meta spokesperson confirmed to Reuters that Bosworth told staff that the division would not be able to afford some projects and others would have to be postponed.

Reality Labs is central to Meta's ambitions to become a metaverse company. The term "metaverse" is borrowed from science-fiction and refers to a future version of the internet that is primarily accessed through immersive technologies such as AR and VR.

Reality Labs cost Meta $2.9 billion in the first quarter of 2022 and $3.3 billion in the final quarter of 2021. Zuckerberg told investors in an April conference call that the company would "slow the pace" of some of its investments.

So far, the company has announced Reality Labs is working on a high-end VR headset called "Project Cambria" and a pair of AR glasses called "Project Nazare." 

Reality Labs isn't the only part of Meta's business that is trying to cut costs. Facebook told staff in early May it was implementing a major hiring freeze in a memo first reported by Insider. The hiring freeze has led to worries among some Facebook workers that layoffs could be next, Insider's Kali Hays reported.

A Meta spokesperson told Reuters that layoffs are not part of the cost-cutting plans for Reality Labs.

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