Meta’s Reality Labs executives don’t understand VR, ex-employees say

Some employees think Meta’s Reality Labs division, which has suffered over $45 billion in losses, is fueled by a lack of understanding of the technology.

Losses racked up by Meta’s Reality Labs division, whose product line currently consists of the VR devices Quest 3, Quest Pro, and Meta-Ray Ban smart glasses, have grown for four consecutive years, and there are no signs of turning the tide.

Last year, Reality Labs' losses topped $16 billion, while this year, in Q1 alone, the company reported a $3.85 billion operating loss.

However, Meta’s CEO, Mark Zuckerberg, calls the metaverse “the next frontier” and is sure it will eventually pick up. He believes that one day, Meta will turn these billions invested into new technologies into profit.

However, the new report from Yahoo Finance, which includes a dozen former Meta employees – mostly managers and executives – shows that losses aren’t necessarily a product of tech innovation but rather a chaotic culture and constant reorganizations, which happen every three to six months.

According to the employees, a popular approach in the company is to promote individuals who have succeeded in other positions within Meta, like Facebook and Instagram, believing that they will replicate the same results inside of Reality Labs.

Such a method, though, only results in incompetence and brings tensions between managers and the rest, employees say.

“They move people into AR that don’t really understand it. It’s hardware and experience, not a news feed in your hand,” Yahoo Finance quoted one former employee.

Employees also think that management lacks direction in the company. An example they cite is the decision to cancel the production of Meta’s in-house chips for its products back in 2021, including Meta Ray-Ban smart glasses.

Meta’s vice president of AR, Alex Himel, canceled the project after over a year of design and building and instead turned to Qualcomm.

This reportedly fueled criticism from employees, with some deciding to leave. They were furious about the company “flushing millions of dollars down the toilet,” an employee said.

The first version of the Ray-Ban glasses, launched in 2021, didn’t get traction among users. The updated version, which allowed users to stream to their Facebook and Instagram feeds directly from the glasses, was more successful and sold more units in a few months than the previous version did in a few years, according to the CEO of Ray-Ban maker EssilorLuxottica.

However, the VR market still seems far away from wooing the masses. Circana Research estimates that total sales of all devices were just over one billion dollars, while Meta’s expenses alone reached $18 billion.