Two of the biggest Chinese tech companies, Tencent and Bytedance, plan to execute many job cuts in their metaverse divisions. According to reports, Tencent is making staff adjustments amidst rumours of hundreds of layoffs in its extended reality division; meanwhile, Bytedance is also aiming to cut personnel in Pico, its metaverse headset subsidiary.
According to various reports, Tencent and Bytedance want to implement hundreds of cutbacks in their metaverse development teams. Tencent, which is well known for its software business, has withdrawn strategies to join the metaverse hardware market, involving hundreds of employees at the company.
While on the other hand, Bytedance advised more than 300 employees to look for new work opportunities and that the prolonged reality division, devoted to the development of metaverse products, would be disassembled. The corporation confirmed staff adjustment as its plans had changed, but the company dismissed the idea that the group mentioned above would be dissolved.
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Details about Tencent
Tencent had been running on a dedicated metaverse ring controller project, but the initiative was shelved due to its high investment and the poor forecast for its profitability. The source stated, “It no longer fits entirely in with the updated approach the corporation had adopted as a whole.” Reports claim that Tencent briefly explored virtual reality about seven years ago, and that reignited the company’s interest in the field in 2021.
Bytedance reducing staff
Pico, the hardware section of Bytedance’s metaverse headset hardware division, is also struggling and planning to cut hundreds of jobs. South China Morning Post reports that some groups of the company plan to lose 30% of their workforce across all departments, including higher-level positions, due to these layoffs. The company has just released its latest Pico series, anticipating developing a foothold in Asian markets. The launch had been thriving, with reports claiming that the corporation holds 15% of the market for VR headsets compared to the almost 85% controlled by Meta’s offerings.
The Founder and CEO of Pico Henry Zhou anticipated they would sell more than 1 million headset units. The reports came during the global push for big corporations to reduce their efforts in making metaverse-based hardware and software, thereby reducing field expenditures. Microsoft and Meta are two Western IT companies that have executed similar moves.
Other companies are reducing staff.
As part of its 10,000-employee layoff round, Microsoft is shutting down several metaverse-focused teams after completing a trim of 13% of its headcount in 2022 to adapt to the new market situation after the coronavirus pandemic. On January 18 2023, in a post with experts at the Bitcode Method site Microsoft announced among the 10,000 jobs to be cut in 2023, 5% represent the company’s global workforce and teams behind initiatives like AltspaceVR and the Mixed Reality Tool Kit.
AltspaceVR platform was aimed at administering services to facilitate the invention of virtual environments for events with the involvement of creators, artists, brands, and businesses. The Mixed Reality Tool Kit is an open-source set of tools to amplify user interfaces for the metaverse. However, even with the company reducing staff high, ranking officials believe in the metaverse and other off-base technologies and the progress these will bring in the future.
The CEO of Microsoft, Satya Nadella, noted: “The sense of presence that metaverse tech can bring is game-changing.” Meanwhile, a social media company Meta, which has anticipated it, will proceed to lose money on the metaverse in 2023 while planning another wave of layoffs.
According to Meta CEO Mark Zuckerberg, the move is called “the flattening” internally; the situation is also affecting the self-confidence of the employees, who criticised how the vision for the “year of efficiency,” a term used to describe the plans of the company for 2023 and how they are being executed. One employee noted, “Honestly, it’s still a mess.
The year of efficiency is kicking off with many people getting paid to do nothing.” Despite the headcount of the Meta Company in December 2022, another employee of the company’s metaverse and virtual reality (VR) division, John Carmack, noted. “I think our organisation is operating at half the effectiveness that would make me happy.”
According to the same report, the company is targeting middle-management employees who are asked to step down to non-management roles or abandon the corporation. Despite all the cost-cutting measures taken by the company, it has acknowledged that the metaverse is still one of its primary focuses in the long term and that it will proceed to invest in this area.
After a global push, the two Chinese giants implemented personnel reductions in their respective metaverse branches and scrapped the development of specialised metaverse ring controllers. To reduce expenses in the field by cutting down on their efforts to make metaverse-based hardware and software.