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A year later, Meta’s pivot to the metaverse is proving even more expensive. Reality Labs is losing more money than ever, Facebook’s parent company disclosed in its latest earnings report.

Reality Labs, the unit that oversees the company’s virtual and augmented reality projects, lost $3.7 billion in the third-quarter of 2022, a jump from a $2.6 billion loss a year ago and $2.8 billion last quarter. Reality Labs has lost more than $9 billion so far in 2022. And the company’s finance chief said the trend is unlikely to reverse anytime soon. “We do anticipate that Reality Labs operating losses in 2023 will grow significantly year-over-year,” outgoing CFO Dave Whener said in a statement.

That’s significant because Meta’s massive investment in Reality labs has already proved costly for the company. Meta reported earlier this year that it lost $10 billion on Reality labs in 2021. The company also confirmed that the “next generation of our consumer Quest headset” is expected to launch “later next year,” an apparent reference to a Meta Quest 3.

CEO Mark Zuckerberg also warned that the company could face “near-term challenges on revenue.” The company reported $28 billion in revenue for the quarter, which was in line with analyst expectations, but “still behind where I think we should be,” according to Zuckerberg.

Zuckerberg also confirmed that Meta would continue to slash hiring as it deals with slowing revenue growth. “Some teams will grow meaningfully but most other teams will stay flat or shrink over the next year,” he said. “In aggregate, we expect to end 2023 as either roughly the same size or even a slightly smaller organization than we are today.”

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