Zuckerberg to Make Deep Cuts in Metaverse Group

Core Insights - The company is reportedly planning a 10% workforce reduction, with deeper cuts of 30% expected in the Facebook Reality Labs unit due to significant losses totaling $70 billion since 2021 [2][3] - The focus on AI investments is impacting budget allocations, with the company prioritizing AI over its metaverse ambitions, which have not yet materialized [1][3] - The company is actively investing in hardware, having recruited a top designer from Apple to enhance consumer-facing product design, despite the ongoing cuts in the metaverse unit [6][8] Financial Performance - The Facebook Reality Labs unit has incurred losses of $70 billion since 2021, prompting the need for deeper budget cuts [2] - The overall cuts in the Reality Labs unit are expected to be more severe than those in other parts of the company, indicating a strategic shift in resource allocation [2][3] Strategic Direction - The company is focusing on building data center capacity to support AI initiatives, which are seen as critical for monetizing advertising and core products [4] - The recruitment of Apple's top design executive signals a serious commitment to developing consumer hardware, despite the financial challenges faced by the metaverse initiative [6][8]