Recent reports have indicated that two of China’s leading tech companies, Tencent and Bytedance, are planning to reduce their metaverse divisions’ workforces significantly. While Tencent has acknowledged there will be staff cuts due to rumors indicating hundreds may soon lose their jobs in its extended reality division, Bytedance is also reportedly restructuring Pico, their own virtual world headset subsidiary.
Metaverse Isn’t That Important in Tencent is New Business Strategy
Tencent announced to over 300 staff members that they should start actively looking for other job opportunities while also denying the dissolution of their extended reality division responsible for creating metaverse products. The company confirmed adjustments in personnel as a result of modifications in plans; however, they refuted the notion that this division would be eliminated.
Despite Tencent’s initial efforts to develop a metaverse ring controller, the project was ultimately declined due to its exorbitant cost and unforeseeable profitability. According to inside sources, “It no longer fits into the company’s freshened plan for growth.”
Bytedance, too, Decided to Downsize in the Metaverse Area
In a difficult move, Bytedance’s metaverse headset hardware division – Pico – is reportedly set to lay off hundreds of its employees. The South China Morning Post has reported that up to 30% of job losses in certain teams may occur, even extending into higher-level positions. This cost-cutting measure could profoundly impact the company and those affected individuals involved.
Bytedance recently released its fresh Pico series, aiming to carve out a niche in Asian markets. The launch was striking, and reports indicate that the company now holds 15% of the virtual reality headset market–a notable feat considering Meta’s dominance over 85%. Henry Zhou, Pico’s founder and CEO, confidently predicted they should exceed 1 million unit sales.
The Situation is In Tandem with the Rest of the Tech World
As part of the worldwide campaign to slash metaverse-based hardware and software expenses, Microsoft and Meta have decided to cut down on their efforts in this area. As a result, Microsoft will close several groups that were working with metaverse projects as part of its 10,000-employee layoff round. Similarly, Meta has already implemented one trim that removed 13% of its staff last year, but they are now planning for an even bigger round forthcoming. Despite these measures taken by two leading tech giants from the West Coast, losses linked to metaverse projects are expected to still occur in 2023.
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