Meta (META.US) plans to reduce investment in the Metaverse team and hire former Trump administration officials to strengthen political and AI strategies.

Meta Platforms (META.US) plans to conduct a new round of layoffs at its subsidiary Reality Labs, with a reduction of approximately 10% of the department's total employees. The department currently has about 15,000 employees, and the announcement of layoffs may be made as soon as this Tuesday. According to media reports citing sources familiar with the matter, these layoffs will have a greater impact on teams related to the metaverse, primarily affecting employees involved in virtual reality (VR) headsets and virtual social network development. Reality Labs has been responsible for Meta's initiatives in the metaverse, VR/AR, and wearable devices since its inception. Reality Labs is one of the core strategic projects driven by Meta's CEO Mark Zuckerberg. Since 2020, the business has accumulated losses exceeding $60 billion. Despite Meta's continued significant investment in creating an immersive digital world, progress in commercializing the metaverse has been slow, with limited market response. However, reports indicate that Reality Labs is not under pressure across the board. Besides its metaverse business, the department also produces Meta's Quest mixed reality headsets, collaborates with EssilorLuxottica on Ray-Ban smart glasses, and has initiatives in the augmented reality (AR) glasses field. Comparatively, the smart glasses business has shown early signs of success, while competitors such as Alphabet Inc. Class C (GOOG.US, GOOGL.US) and Apple Inc. (AAPL.US) have not made significant breakthroughs in this niche market. Meta's Chief Technology Officer for Reality Labs, Andrew Bosworth, has informed employees of a meeting scheduled for Wednesday and requested as much in-person attendance as possible. Meta has not yet made an official statement to the media regarding the layoff plans. Amid rumors of layoffs, Meta is facing increasing competition in the field of artificial intelligence. The company's latest Llama 4 model has received a poor market response, prompting management to accelerate strategic adjustments. Meta has pledged to invest up to $72 billion in capital expenditure by 2025, focusing on cutting-edge artificial intelligence, data centers, and "personal superintelligence" projects. On the organizational and policy fronts, Meta has announced the appointment of former Trump administration official Dina Powell McCormick as President and Vice Chairman of the company on the same day...