Meta Platforms Inc. META has laid off an undisclosed number of employees from its Reality Labs division, which focuses on developing virtual and augmented reality technologies.
What Happened: The layoffs primarily affected the Oculus Studios unit of the Reality Labs division, which is in charge of developing VR and AR games and content for Meta’s Quest VR headsets.
Employees working on the Supernatural VR workout app were among those impacted by the layoffs. The company shared its regret over the cuts in a post on the official Supernatural Facebook group, reported CNBC on Thursday.
A company spokesperson stated, “Some teams within Oculus Studios are undergoing shifts in structure and roles that have impacted team size.” The restructuring is intended to enhance efficiency in developing future mixed reality experiences for a growing audience, as per Meta.
Meta did not immediately respond to Benzinga’s request for comment.
This development follows Meta's February decision to cut 5% of its total workforce, targeting what it deemed its lowest performers. In January, the company revealed that its Reality Labs division posted an operating loss of $4.97 billion in Q4, despite generating $1.1 billion in sales.
Why It Matters: The layoffs come amidst concerns about Meta’s fundamentals. Earlier this week, Needham analyst Laura Martin reiterated an Underperform rating for Meta Platforms, warning that the company’s fundamentals looked fragile heading into the Q1 report.
Despite the reported losses, Meta has been investing heavily in its Reality Labs division as CEO Mark Zuckerberg continues to express confidence in Meta's long-term investment in augmented and virtual reality technologies. A report in March suggested that the company has been offering above-market-rate salaries to attract VR developers ranging from $600,000 to nearly $1 million annually, despite the mounting losses in its metaverse ventures.
The momentum rating of META is 45.84% while its growth rating is 75.05%, according to Benzinga's Proprietary Edge Rankings. The Benzinga Growth metric evaluates a stock’s historical earnings and revenue expansion across multiple timeframes, prioritizing both long-term trends and recent performance. For an in-depth report on more stocks and insights into growth opportunities, sign up for Benzinga Edge.
Meta stock climbed 2.48% to close at $533.15 on Thursday, as per BenzingaPro.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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