Meta plans 1,500 job cuts as focus towards AI and data centres surges

Meta is poised to lay off approximately 1,500 employees from its Reality Labs division, reflecting a significant internal shift as the company intensifies its focus on artificial intelligence and large-scale data center initiatives. Reports indicate that these layoffs could be announced as soon as Tuesday and may affect about 10% of the division's workforce, which currently stands at around 15,000. This development comes as Meta ramps up its investment in AI infrastructure, raising questions regarding the future of its metaverse-centric division. Reality Labs, which manages Meta's portfolio in virtual and augmented reality, has evolved from its origins with Oculus, a VR headset company founded by Palmer Luckey and acquired by Facebook in 2014. The division has since expanded to include various hardware and software products, such as VR headsets, Ray-Ban smart glasses, and the Horizon Worlds platform, previously seen as a key element of Meta's metaverse strategy. Tensions within the company have reportedly escalated ahead of the expected announcement of layoffs. According to the New York Times, Meta’s Chief Technology Officer, Andrew Bosworth, has called for an all-hands meeting for Reality Labs employees, labeling it the "most important" meeting of the year. Staff have been instructed to attend in person, coinciding with the anticipated layoffs. The uncertainty surrounding Reality Labs has been growing for several months. In December, Gizmodo reported that a proposed 30% budget cut for the division hinted at a broader reallocation of Meta's resources. While this did not indicate an outright abandonment of metaverse initiatives, it suggested that other priorities were increasingly demanding attention. This shift became more evident this week when Meta announced an extensive expansion of its data center network through a new initiative called Meta Compute. The company aims to establish "tens of gigawatts" of AI compute capacity by the decade's end, a scale that could consume energy comparable to that of several large cities. On the same day, Meta welcomed Dina Powell McCormick, a former advisor to Presidents George W. Bush and Donald Trump and an established banking executive, as its new president and vice chairperson. Her appointment is expected to bolster Meta’s policy advocacy, government relations, and partnerships as the company undertakes its infrastructure-heavy projects. CEO Mark Zuckerberg has positioned the AI expansion as a strategic long-term advantage, stating, "How we engineer, invest, and partner to build this infrastructure will become a strategic advantage." He had previously used similar rhetoric in 2022 while justifying significant investments in metaverse technology, asserting that such expenditures would enhance the company's future stability.