Four years ago, Mark Zuckerberg renamed Facebook to Meta to realize his vision of metaverses. According to insiders, $45 billion has already been spent on the project, but the ambitious goal has still not been achieved, TechSpot reports.
That's almost the combined market capitalization of social media rivals Snap and Pinterest, or the price Elon Musk paid to acquire Twitter. Zuckerberg also warned in his 2024 earnings call that losses would continue to "significantly increase."
Former Reality Labs employees describe the unit as disorganized and dysfunctional. Frequent leadership changes and constant reshuffles caused chaos, as many managers were transferred from other Meta divisions without experience in AR and VR.
“Local heroes” from units like Instagram were promoted to lead virtual reality teams, one employee said. Another former employee said Meta was recklessly “playing the human resources lottery,” giving AR and VR roles to people who “really had no experience in those areas.” This combination of unqualified leadership and a vague product strategy contributed significantly to the unit’s huge losses.
Financial statements show that over the past few years, the division's losses have increased significantly: $6 billion in 2020, $10 billion in 2021, $13 billion in 2022, and $16 billion in 2023. In the first quarter of 2024 alone, the division incurred another $3.8 billion in losses, which exceeded the total income for 2022 and 2023.
As costs have increased, the division's revenue has also declined each year. Investment analyst Gene Munster of Deepwater Asset Management believes the division is a "financial disaster" that is causing Meta's stock to fall. While some investors are still patient, hoping for the long-term prospects of AR and VR, that optimism is gradually fading.