Tencent, Bytedance, and Microsoft Scale Back Metaverse Development Efforts

This week, Tencent and Bytedance, two of China's largest tech companies, are planning to lay off hundreds of employees in their metaverse development groups.

​Tencent, known primarily for its software business, is abandoning its plans to enter the metaverse hardware market, affecting hundreds of employees in the company's extended reality division. The company confirmed staff adjustments were being made as plans had changed, but dismissed claims that the group responsible for developing metaverse products would be disbanded.

Bytedance's Pico, a metaverse headset hardware division, is also facing similar difficulties, with plans to cut hundreds of jobs. The South China Morning Post reports that some groups within the company are expected to lose up to 30% of their employees, including higher-level positions.

These news come amid a global trend for big companies to cut their investments in metaverse-based hardware and software, reducing expenses in the field. Microsoft and Meta, two western tech giants, have also executed similar actions. Microsoft is shutting down several metaverse-focused groups as part of its 10,000-employee layoff round, while Meta is reportedly planning a new round of layoffs after trimming 13% of its headcount last year.

As the metaverse concept shifts from hype to reality, the current industry hotspots are focused more on ChatGPT. With Microsoft and Google leading the charge, technology companies are beginning to invest in generative AI, leaving the metaverse behind.