- The budget cut is estimated to save the company some $3 billion
- Meta's Reality Labs has lost $55 billion since 2019
- On July 31, Meta will hold its next earnings call
Meta, the parent company of Facebook, Instagram and WhatsApp, is set to cut the budget of Reality Labs by some 20% between 2024 and 2026. Reality Labs is the division of the company responsible for the development of its metaverse hardware and software.
This is based on a report from The Information and is consistent with recent reports that Meta intends to put Reality Labs into production in advance of multiple high-profile hardware launches that are scheduled to occur over the course of the next few years.
According to Bank of America analysts Justin Post and Nitin Bansal, Meta would save roughly $3 billion as a result of the cost-cutting measures. In a research note on July 19, they stated that some of those savings might be directed toward Meta's artificial intelligence initiatives.
However, those initiatives are also on hold in some areas (such as Brazil and the European Union) as Meta tries to evade increasing regulatory scrutiny in the AI industry. The plans that Meta has for AI and virtual reality will probably become more apparent on July 31, when it releases its second-quarter earnings.
Insiders should not be surprised by the timing of the cost-cutting measure. On July 31, Meta will hold its next earnings call. According to analysts, the company will report revenue of $36.45 billion, up 27% from 2023, in Q1 of this year.
On the other hand, Reality Labs reported a $3.8 billion loss for the first quarter of 2024. Even so, it is possible that some of those losses had nothing to do with the business's activities in the metaverse. During Meta's Q1 2024 earnings call, CEO Mark Zuckerberg informed investors that "an increasing amount of our Reality Labs work is going toward serving our AI efforts."
Meta's Reality Labs has lost $55 billion since 2019. Its first-quarter sales increased by 30% year over year to $440 million and the budget cut is estimated to save the company some $3 billion. Despite the not-so-impressive numbers, Bank of America analysts predict Meta's share price to increase by 14.8%, from $479 to $550 in the upcoming year.
How hackers stole more than $230 million from crypto exchange WazirX in hours
Meanwhile, TheRadar earlier reported that recently, an Indian cryptocurrency exchange, WazirX, was cyber-attacked and more than $230 million was stolen by the attackers. Speculation had spread about what actually happened and why the breach was so easy for the attackers. Now, the exchange has opened up about what exactly transpired and what the next steps are for the company.
In an X post, the exchange described the attack as unfortunate and stated its commitment to transparency and community welfare.
