Meta’s metaverse move fails, leading to massive restructuring and AI shift: Insights on the tech giant’s newest transition
Despite the idea driving its new name, Meta, formerly known as Facebook, suffered in its move to the metaverse. Due to the company’s three straight quarters of revenue declines and its stock’s worst year to date, Meta decided to investigate other business opportunities.
The business changed its attention from the metaverse to artificial intelligence in its pursuit. Due to the pivot, Meta had to fire thousands of staff and shut down numerous initiatives, including Facebook and Instagram NFTs.
Although it appeared like Meta had finished developing the virtual world, the $24 billion metaverse chapter has not yet been fully closed.
Not finished yet
The company’s virtual workspace, Horizon Workrooms, hosted a press conference on March 29 led by Nick Clegg, the director of global relations for Meta. Clegg discussed plans for the metaverse to choose reporters wearing the company’s VR headsets in Washington while he was watching from London.
The news conference follows CEO Mark Zuckerberg’s announcement of reorganization plans in light of the current economic climate. Ten thousand Meta workers were let go, Reality Labs, its metaverse subsidiary, was shut down, and initiatives like Instagram and Facebook NFTs were abandoned.
The head of worldwide affairs told the guests that the metaverse would be where computing will take place in the future, despite the company’s declining interest in the technology.
We’re going to stick with it [the metaverse] because we really believe, all the early evidence suggests, that something like this will be the heart of the new computing platform. But it’s going to take a while.
Later, Clegg said that Meta must put emphasis on advertising and business in order to maximize its $24 billion investment in the metaverse. This is consistent with CEO Mark Zuckerberg’s claim that the company might generate billions of dollars. Yet, for the metaverse to be useful, more people need to use it.
Meanwhile, Meta’s Facebook and Instagram platforms have historically fared successfully, generating substantial profits from the distribution of user-specific content. The business hasn’t tried out metaverse advertising, though.
Disney, a rival entertainment juggernaut that fired 7000 workers in March, shut down its metaverse business. Microsoft, a tech company, closed its metaverse branch in 2023 after laying off 10,000 workers.
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The game that Meta is playing with its commitment is risky. Whether it’s generative AI or the metaverse, the company wants to play all narratives. But, the company’s lack of interest in the area might have an impact on thousands of families and the industry as a whole.