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Meta CEO Mark Zuckerberg plans to significantly cut funding for the metaverse division, which he previously called the company's future and the reason for Facebook's rebranding. This was reported by Bloomberg, citing sources within the company.
Reality Labs Budget Cuts
According to the agency, Meta management is considering cutting the budget for Reality Labs by 30%. This division is responsible for developing the metaverse, including the Horizon Worlds platform and the Quest VR headset.
Such a significant budget cut could lead to layoffs, but a final decision on this matter has not yet been made, Bloomberg notes.
Investor Reaction
Investors reacted positively to the funding cuts. Meta shares rose after the announcement of plans to cut costs in the metaverse division. This indicates that the market supports the company's decision to optimize its costs.
Metaverse Cost Optimization
Last month, Zuckerberg held a series of meetings in Hawaii to discuss budget planning for 2026. He ordered a 10% cut across all spending areas, calling it a standard optimization measure. The group developing the metaverse was asked to cut its budget even further because the company "didn't face the expected competition." Since the initiative's launch in 2021, the group's cumulative losses have exceeded $70 billion.
Shifting Focus
Zuckerberg has been mentioning the metaverse less frequently during earnings calls, focusing on more pressing topics such as artificial intelligence and hardware solutions, including Meta's Ray-Ban smart glasses. This may indicate a shift in the company's strategic direction amid growing market uncertainty.
New Support Center
In addition to the funding changes, Meta has increased its focus on customer support by launching a centralized help center for Facebook and Instagram users. The company acknowledged that previous solutions "didn't always meet expectations."
The new platform offers tools for reporting issues and restoring account access. Users will also be able to get answers through AI-powered search, which should improve the customer experience.
In Conclusion
The 30% cut in Metaverse funding highlights Meta's shifting priorities in the face of financial uncertainty and increasing competition. While the company continues to explore new ways to optimize costs, a focus on customer support and other areas, such as artificial intelligence, could be key to its future success.
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