- A Meta investor and CEO of an investing firm wrote a critical open letter to the company.
- The investor urged Meta to reduce its metaverse spending and cut down the workforce expenses.
- Mark Zuckerberg has touted the metaverse as the future since 2021, but results haven’t shown.
A Meta shareholder wrote an open letter urging the company and CEO Mark Zuckerberg to spend significantly less money on the metaverse project and dramatically reduce the workforce expenses by 20%.
“Meta needs to get its mojo back,” Brad Gerstner, the CEO of investing firm Altimeter Capital, wrote. Gerstner’s letter echoes a wider reaction against the metaverse, which is the idea of a virtual shared reality (essentially similar to platforms like Roblox) where people can meet with digital avatars and do real-life activities.
In the letter, Gerstner says at the same time “Meta ramped up spend,” the company “lost the confidence of investors.” The shareholder recommended multiple methods for the company to “get fit and focused,” including by “aggressively” cutting at least 20% of employee-related expenses, and reducing its financial investments in the metaverse space.
“While the increased AI investment was clearly well timed, Meta’s investment in the metaverse, while smaller than the AI investment, has gotten the most attention and has led to much confusion,” Gerstner wrote. He additionally praised the company’s investment in the concept of the metaverse but said the potential amount of money they could sink in it over the years would be “super-sized and terrifying, even by Silicon Valley standards.”
Meta’s concerted and costly effort to build its ‘metaverse’ has fallen flat so far
Zuckerberg has touted the possibilities of the metaverse since as early as 2021, when he announced the concept and shift in company priorities in an October announcement that declared “a next chapter for the internet.” His company has dropped at least $15 million on Reality Labs, the Meta venture focused on virtual and augmented reality technology.
But the results haven’t been promising — the number of monthly active users on the company’s main virtual platform, Horizon Worlds, has fallen almost 50% short of the company’s goal for 2022. Internal memos obtained by The Verge earlier this month showed that even Meta employees working on Horizon Worlds were not using the platform, which was rife with bugs and other playability issues.
“Everyone in this organization should make it their mission to fall in love with Horizon Worlds. You can’t do that without using it,” Vishal Shah, the Vice President of Metaverse at Meta, said in one of the memos, according to The Verge. “Get in there. Organize times to do it with your colleagues or friends, in both internal builds but also the public build so you can interact with our community.”
Other internal documents obtained by the Wall Street Journal said that many Horizon Worlds users didn’t last longer than a month and that most of the platform’s user-created worlds weren’t visited by anyone.
Numerous viral social media posts and analysis pieces have criticized the “metaverse” as nothing more than a buzzword and cited specific features of metaverse platforms, like the shoddiness of Horizon Worlds graphics. A tech analyst previously told Insider that the company’s “transparency with investors has been a disaster.” The details of Meta’s VR work and its future are vague despite the huge sums of money poured into it.
The public reluctance to embrace the metaverse has come along with a wider downturn for Meta, which did not respond to Insider’s request for comment. The company’s shares have been very down since last year and Zuckerberg reportedly announced a hiring freeze toward the end of September, saying many teams would have their staff and budgets reduced.