Reality Labs' Dysfunctional Environment
Former high-level Reality Labs employees have described the division as dysfunctional and disorganized, with frequent leadership changes and constant reshuffling causing chaos. Many managers were brought in from other Meta divisions, despite lacking expertise in AR and VR, which has led to unqualified leadership and poor decision-making.
The work environment has been described as "chaotic," with "local heroes" from other divisions like Instagram being promoted to lead virtual reality teams without relevant experience. This lack of expertise has resulted in poor product strategy and decision-making, contributing to the division's significant losses.
The practice of "playing employee bingo," where employees are assigned AR and VR roles without proper understanding or experience, has been particularly damaging. This approach has led to a lack of clear direction and vision, causing confusion and frustration among employees.
The combination of unqualified leadership and unclear product strategy has significantly contributed to Reality Labs' staggering losses. The division's inability to effectively develop and execute a metaverse strategy has resulted in a massive financial burden for Meta, with $45 billion invested and little to show for it.
Note: The dysfunctional environment and lack of expertise in Reality Labs have had severe consequences for Meta's metaverse ambitions. The company's inability to develop a clear and effective strategy has led to significant financial losses and raised questions about the future of the division.
Financial disclosures show the branch's losses have surged over the last several years – more than $6 billion in 2020, $10 billion in 2021, $13 billion in 2022, and $16 billion in 2023. The division lost another $3.8 billion in just the first quarter of 2024, wiping out its total revenue from 2022 and 2023 combined.
Despite rising expenditures, the division's annual revenue has declined steadily since 2021 due to weak sales and continued failure to gain mainstream traction. Wall Street analyst Gene Munster of Deepwater Asset Management told Yahoo Finance that the division is a "financial disaster" dragging down Meta's stock.
While some investors have remained patient, betting on the long-term promise of AR and VR, that optimism is starting to fade. Barring rapid mainstream adoption, losing $10-15 billion annually on Zucckerberg's metaverse pipe dream is unsustainable.
Does this help you to get a sense of what was happening with the Metaverse, especially with Meta who dove in, and invested tens of billions of dollars?