Meta, the parent company of Facebook, carried out additional restructuring of its Metaverse business to focus on artificial intelligence (AI).
Meta laid off hundreds of employees, mainly at Reality Labs, which led development of Virtual Reality (VR) devices, Bloomberg reported on the 25th, citing sources. Reality Labs had already cut more than 1,000 jobs in January.
Meta even changed its corporate name in 2021 to enter the "Metaverse" business, but after recording losses exceeding $70 billion (about 100 trillion won) over the past five years, it ultimately decided late last year to exit most of the business except for some areas such as smart glasses.
In addition to Reality Labs, layoffs also affected the social media (SNS) team and overseas sales and recruiting departments.
A Meta Spokesperson said of the layoffs, "Meta teams regularly implement reorganizations and changes to create the optimal environment for achieving goals," adding, "Employees who were affected are seeking other opportunities."
Meta has been spending astronomical sums to build AI infrastructure, signing back-to-back deals to buy and lease AI chips from Nvidia, AMD and Google. Meta has said it will invest up to $135 billion (about 200 trillion won) this year alone in AI infrastructure and related investments.
While restructuring low-profit businesses, Meta decided to grant stock options to senior executives. According to The Wall Street Journal (WSJ), Meta plans to introduce a stock option program that would grant each executive up to hundreds of millions of dollars in compensation on the condition that the company's market capitalization grows roughly sixfold from the current $1.5 trillion to $9 trillion (about 13,492 trillion won) by 2031.
It is seen as a decision to offer massive financial rewards to secure the loyalty of key talent.