Meta Cuts 10,000 More Workers After Scrapping NFT Plans—Is the Metaverse Still On?

Meta’s workforce ballooned in recent years as the Facebook parent company signaled its ambitions for the metaverse—but recent moves suggest that it is feeling the sting of changing tech trends and rough market conditions. The company today announced another round of layoffs, one day after saying that it was “winding down” support for NFTs.

Co-founder and CEO Mark Zuckerberg wrote in a post today that Meta will shed about 10,000 further employees in the months ahead across multiple waves, as well as close about 5,000 current listings for open positions. The moves will affect its recruiting department this week, its tech groups in April, and business groups in May.

Meta previously laid off about 11,000 employees in November, representing about 13% of its workforce at the time, per CNBC. As of December 31, 2022, Meta reported having a headcount of 86,482 people across all divisions—a 20% jump from the year prior—but said that the tally still included most of the people included in the November layoffs.

Zuckerberg framed the latest cuts as being part of Meta’s broader “year of efficiency” campaign, in which the social media giant attempts to continue ahead with a leaner team while flattening its organizational structure, “canceling lower-priority projects,” and optimizing tools and processes across the company.

What does this mean for the metaverse then? Meta made a lot of noise in 2021 around the idea of the future 3D internet, changing its company name to reflect what Zuckerberg described as a new frontier for the dominant tech company. The news helped spur interest around Web3 metaverse games, as well, with virtual land NFT plots surging in value.

But metaverse buzz quieted down in 2022 amid an array of backlash—to the idea of an immersive internet, Meta’s early version of it, and the rising costs of digital real estate.

Meta reaffirmed its focus on building the metaverse late last year, but it has increasingly pivoted its messaging towards the renewed fervor around artificial intelligence (AI) thanks to the success of rival OpenAI’s ChatGPT. Indeed, Zuckerberg’s post today mentions AI ahead of the metaverse among technologies that Meta is focused on.

“Our single largest investment is in advancing AI and building it into every one of our products,” he wrote. “Our leading work building the metaverse and shaping the next generation of computing platforms also remains central to defining the future of social connection.”

In Meta’s Q4 2022 earnings call on February 1, Zuckerberg said that the “major technological waves driving our roadmap are AI today and over the longer term the metaverse,” adding that the firm’s “priorities haven’t changed since last year.”

He emphasized then that Meta continues investing in virtual reality and mixed reality headsets via its Reality Labs division to build towards a future, immersive internet. However, Zuckerberg added that “most people are going to experience the metaverse for the first time on phones and start building up their digital identities across our apps.”

Yesterday, Meta announced that it was “winding down” support for NFTs on its platforms less than one year after entering the space. Instagram first launched an NFT trial in May 2022, letting select users of the photo-sharing app display their owned artwork and collectibles. Facebook later added the same feature.

In November, Instagram said that it would let creators mint their own NFTs via Polygon, an Ethereum scaling network, and then launched exclusive NFT mints from notable creators like photographer Isaac “Drift” Wright and AI artist Refik Anadol.

In a Twitter thread, Meta’s Commerce and Fintech Lead Stephane Kasriel said that the firm would shift away from NFT collectibles “to focus on other ways to support creators, people, and businesses on our apps, both today and in the metaverse.”

How much of a role NFTs and Web3 would play in Meta’s version of the metaverse was always unclear. Meta’s metaverse demonstration video in 2021 showed NFTs being sold after a digital concert, and Zuckerberg made a point to emphasize what he saw as the benefits of interoperability, but the firm has yet to detail the extent of Web3 tech in its plans.

Web3 metaverse builders see NFTs as key to their vision of an open metaverse in which users can bring their owned avatars, apparel, and items across online platforms. But when tech giants like Meta and Microsoft have announced metaverse plans, they’ve signaled interest in interoperable standards—but no clear embrace of blockchain networks and assets.

Meta declined further comment to Decrypt regarding the impact of layoffs on its metaverse push, as well as how its NFT announcement ties into that.

Based on today’s announcement and other recent comments, Meta still says that it’s building towards the metaverse. Meta has consistently framed it as a long-term process, but that message is especially being amplified as AI developments take greater precedence across the tech world—and NFTs won’t be a key factor in that push, at least for now.