The Meta Platforms Inc (NASDAQ: META) stock price fell 0.30% during premarket trading after news emerged that the tech company would be laying off workers later today, according to an exclusive report by Reuters.
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The report indicated that employees had been notified of the job cuts through an internal discussion forum. The notice said that the employees would know their employment status later today, including whether they had been let go as the company strives to reduce operating costs.
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The latest round of job cuts at META was expected after the company appointed a new head for the Metaverse unit, also known as the Facebook Agile Silicon Team or FAST. The unit has about 600 employees, and it is unclear how many will be fired.
Investors are also concerned that deep job cuts would slow the company’s efforts to build augmented and virtual reality products that allow users access to unique immersive virtual worlds known as the “metaverse”. The company mainly focuses on AR glasses that could “redefine our relationship with technology”.
The FAST business unit was also focused on developing custom chips that could be used within Meta’s devices to perform unique tasks and operate more efficiently. The unit’s main goal was to differentiate Meta’s devices from others that have entered the budding AR/VR market.
However, Meta has struggled to manufacture chips that can compete effectively with those seasoned chipmakers produce. The firm has contracted Qualcomm to manufacture chips for its devices currently being sold to consumers.
The company’s struggles with its chips also extend to other business units as another team working on artificial intelligence (AI) ships had encountered multiple roadblocks, with its former leader departing from the company. However, the company has since appointed a new leader for the unit.
It has become crucial for tech companies to develop their chips as the prices of industry-leading AI chips, such as Nvidia’s, skyrocketed due to the high demand from multiple industries and low supplies of the chips.
However, as many firms have discovered, it is not easy to design and manufacture a new AI or AR/VR chip from scratch, given the significant resources at Meta’s disposal. Yet, the company has struggled to develop its chips.
Meta Platforms (META) stock price.
The Meta Platforms (META) stock price was trading down 0.32% at $300.04, from Tuesday’s closing price of $300.94.
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