Meta Platforms is planning cuts to the metaverse—an arena Mark Zuckerberg once called the future of the company—and will shift spending to AI wearables https://t.co/LveOTxGktD ...

Now, the big tech story of the day is Meta. The stock's higher on a report that said the company is considering cutting the Metaverse Group's budget by as much as 30%. The stock has been under pressure lately on concerns about its massive spending and latest earnings.Meta raised the low end of total expenses for the year to $116 billion. Joining me now is Mike Pru, uh, research director at Forester, and Lloyd Walmsley, senior research analyst for Missouo. Lloyd, uh, just to clarify here, this isn't a a cons ...

Zuckerberg's bet on immersive online worlds has lost the company more than $77 billion since 2020. ...

Core Insights - The company is planning to cut about 10% of its workforce as part of budget considerations for 2026, with a focus on reallocating resources towards AI initiatives [1] - Significant cuts, approximately 30%, will be directed towards the Reality Labs division, which is involved in augmented and virtual reality projects, indicating a shift in focus due to underwhelming adoption of virtual reality [2][3] - The company is rebranding its focus towards a metaverse that integrates AI and augmented reality, rather than solely virtual reality, reflecting current market realities [3] Company Developments - The departure of Alan Dye from Apple to the company is seen as a major gain, as he was instrumental in the design of key Apple products, suggesting a potential enhancement in the company's design capabilities [5] - The company is experiencing a talent drain from Apple, which has been losing key design personnel since Johnny Ive's departure in 2019, indicating a broader shift in executive talent within the tech industry [6][7] - The company is facing challenges in its large language model department, with morale issues stemming from the loss of key personnel and a potential shift towards outsourcing AI development to Google [8][9] Market Positioning - The company is prioritizing AI in its product offerings, particularly with the success of its Ray-Ban smart glasses, which have generated significant revenue and positive reception from marketers [12] - The integration of generative AI into its advertising strategies has improved content targeting, enhancing user engagement and satisfaction [12] - Concerns from the EU regarding competition in messaging services like WhatsApp highlight the regulatory challenges the company faces in maintaining its market position [13]

It's a signal. And what's interesting about it is, as usual, as they think about the budget for 2026, they're going to make layoffs. They're going to cut about 10% across the entire business.That tends to be what happens at this time of year. But he gathered his top executives in his house in Hawaii to discuss, okay, where should most the resources be coming from. Because, remember, they are spending a ton on AI and people have been worried about that.How can he offset that. Well, 30% more cuts, therefore, ...

What's interesting about this is. The consumer's general attitude to technology. Right.Am I going to use an AI to every day or am I going to jump headfirst into the metaverse. It's a big share move. But I think what I find interesting about your response is that you don't find it that surprising that there is being a back in the Metaverse initiative. No, I really don't find it surprising.If anything, I think people will wonder why it has why these cuts haven't happened sooner. Because I think, you know, eve ...

Core Insights - The consumer's attitude towards technology is shifting, with a notable decrease in time spent on screens and social media, leading to budget cuts in metaverse initiatives [2][3][15] - There is a significant overlap between AI and virtual reality technologies, but the demand for these innovations is not yet strong enough to justify large expenditures [4][6][7] - The standalone media app has seen limited adoption, with only 3.5 million users globally, indicating challenges in consumer acceptance compared to the billions using other platforms [11][12] Industry Trends - A 30% budget cut for metaverse initiatives is anticipated, which will likely include layoffs, reflecting a broader trend of companies reassessing their investments in emerging technologies [3][15] - Despite the popularity of social media, users are increasingly looking to reduce their screen time, which may impact future growth in these platforms [2][3] - Regulatory pressures are mounting on social media platforms, particularly in the EU, which could affect their operational strategies and competitive landscape [12][14][15] Company Performance - AI is positively impacting the business's bottom line and enhancing algorithms, but consumer-facing ventures are struggling to gain traction [5][10] - The integration of AI within existing platforms like WhatsApp and Instagram is more successful than standalone applications, which face stiff competition [12][14] - The company is experiencing challenges in user adoption for new technologies, which may hinder future growth prospects [11][12][15]

Group 1 - The company plans to focus its investments on wearables, particularly augmented reality glasses [1] - The company does not intend to abandon its efforts in building the metaverse [1]

Sounds like in the last few weeks. Last month, Zuckerberg assembled leadership. They looked at the budget for next year, and Metaverse is where they want to focus their cuts.Bring us your reporting. Yes. So this is an annual thing, right.Looking ahead to 20, 26 budgets. In this case, Mark Zuckerberg has a nice home in Hawaii where they have a series of meetings. Executives come in in the month of November.And to your point, they talk about this year, 10% cuts sort of across the board, looking at all the dif ...

Group 1 - The company is planning to implement budget cuts for the upcoming year, with a focus on the Metaverse, which may see cuts of up to 30% compared to a general 10% cut across other teams [2][5][6] - Mark Zuckerberg has previously positioned the Metaverse as the future of the company, aiming for it to reach a billion users and support significant digital commerce [3][4] - Despite the cuts, the company will continue to invest in augmented reality (AR) glasses, indicating a shift in focus from immersive virtual worlds to hardware development [5][8] Group 2 - The market for the Metaverse has not developed as anticipated, leading to a reassessment of spending in this area [5][6] - The VR group is expected to be significantly impacted by the Metaverse budget cuts, although investments in AR glasses, such as the Ray-Ban partnership, will continue [7][8] - Analysts have reacted positively to the news, suggesting that the cuts may be bullish for AI spending, indicating a strategic pivot within the company [7]