Meta Layoffs as AI Investment Grows

Meta is set to lay off approximately 1,500 employees from its Reality Labs division, underlining a significant internal transition as the company increases its investment in artificial intelligence and extensive data centre initiatives. A report from The New York Times indicates that the layoffs may be announced as soon as Tuesday and are likely to affect around 10 per cent of the division’s staff, which currently numbers about 15,000.

Impact on Reality Labs and AI Focus

The anticipated job reductions come during a period when Meta is greatly amplifying its investments in AI infrastructure, raising important questions about the future trajectory of its metaverse-centric division.

Role of Reality Labs

Reality Labs manages Meta’s virtual and augmented reality offerings. This division originated from Oculus, the VR headset company founded by Palmer Luckey and initially funded through Kickstarter. Facebook acquired Oculus in 2014, and since then, it has evolved into the company’s primary hub for VR and AR technologies, including headsets, Ray-Ban smart glasses, and the Horizon Worlds platform, previously deemed a foundation of Meta’s vision for the metaverse.

Internal Tensions Ahead of Job Cuts

Reports suggest that internal strife within the company has escalated in anticipation of the forthcoming announcement. The New York Times noted that Meta’s chief technology officer, Andrew Bosworth, has organised an all-hands meeting for employees in Reality Labs on Wednesday, characterising it as the “most important” meeting of the year. Employees are required to attend in person, just a day after the anticipated layoffs could be revealed.

Growing Uncertainty Surrounding Reality Labs

Uncertainty regarding Reality Labs has been on the rise for several months. In December, journalist James Pero from Gizmodo mentioned a projected 30 per cent budget cut for the division, indicating a broader redistribution of resources inside Meta. Although this change did not imply an outright abandonment of metaverse initiatives, it suggested that other priorities were increasingly demanding focus.

AI Investment Accelerates

This shift became more pronounced this week. On Monday, Meta announced an ambitious increase in its data centre network under a new initiative named Meta Compute. The company aims to develop “tens of gigawatts” of AI computing capacity by the decade’s end, a scale of infrastructure that would utilise power similar to that consumed by numerous large cities.

Leadership Changes and Strategic Goals

Meta also introduced a new senior leadership position on the same day. Dina Powell McCormick, previously an advisor to US presidents George W. Bush and Donald Trump and an experienced figure in banking, will be joining as president and vice chairperson. This appointment is anticipated to assist Meta with policy engagement, government relations, and partnerships as it progresses with infrastructure-intensive ventures.

CEO’s Vision for AI Infrastructure

Meta’s chief executive, Mark Zuckerberg, positioned the AI development as a strategic long-term advantage, stating that the manner in which the company engineers, invests, and collaborates to build this infrastructure will become crucial. Similar sentiments were expressed in 2022 when he defended substantial spending on metaverse technology, asserting that such investments would fortify the company in the long run.