Meta's nascent strategy to launch its own retail stores is already being undone, according to people familiar with the situation.
The company formerly known as Facebook only a year ago opened its first-ever physical store in California with a PR push celebrating it as a way to "experience" some of the metaverse, CEO Mark Zuckerberg's vision of a realistic virtual world. As part of the company's metaverse strategy, the Meta Store serves mainly as a showroom for its Quest headset, where people can test out the hardware and purchase it. It was thought upon its opening to be the beginning of Meta's retail ambitions. The company at one point discussed having stores open globally.
Those ambitions appear to have been short lived. Martin Gilliard, Meta's head of store, left the company earlier this year after a nearly three-year stint leading retail efforts and heading up its physical retail plans and first store opening, according to two people who requested anonymity because they were not authorized to speak to the press. He has not been replaced, they said, and is now working at a VC-backed startup in "stealth" mode, his LinkedIn says.
There were plans to open at least one more store this year, one person said. Those plans faltered as Meta last year struggled with slowing revenue growth for the first time in its history, as its advertising business took a major hit from Apple's privacy changes and a slowdown in digital ad spending due to economic inflation and other macroeconomic factors. Physical retail has proved tough for other Big Tech companies, like Amazon and Microsoft. Meta representatives did not respond to multiple requests for comment. Gilliard declined to comment.
This isn't the first time Meta dabbled with retail outlets. In 2017, it opened and closed several pop-up stores primarily to show off Oculus, the original name for the Quest headset. It tried pop-ups again the following year for the holiday season.
Zuckerberg initially pushed back hard against a Wall Street that disliked his wild spending on metaverse projects. He caved toward the end of last year, enacting in November Meta's first-ever mass layoff. Since then, the CEO has taken a shine to lowering headcount and cost-cutting, dubbing 2023 Meta's "year of efficiency." The company last month completed another layoff that was broken up into three rounds. All told, Meta has cut more than 20,000 employees in the last seven months.
Other areas where the company is cutting costs include offices and products. Meta is subleasing large amounts of office space in Seattle and the U.K., while forcing employees elsewhere to return to the office at least three days a week after promoting remote work since the early days of the pandemic. It has also discontinued the sale of its Portal video chat device, previously part of its retail store, and will not be releasing a planned watch product. The watch would also have been featured in Meta stores, the person familiar said.
Susan Li, Meta's CFO, said in March the company would "wind down projects in some places and shift resources away from some teams" in an ongoing effort to trim expenses and streamline the company's efforts.
As for the existing Meta Store, which now only shows headsets and AR-infused Ray-Ban sunglasses, it remains open. Hours are only during the week and closed on the weekend, in line with Meta's office hours. The store is deep within the company's large Burlingame office campus and it feels less like a retail outpost for the public than a small research center for Reality Labs.
On a recent visit to the store, it was empty of customers while at least 15 store and Reality Labs staffers worked and mingled. One employee told Insider a "good day" at the store sees about 60 people come in, most often to demo a headset on the large stage set up for the purpose. Above the stage is a camera that records all live demos for research purposes. Another employee, when asked if the store would remain open through this year, said "I'm not sure, but I think so."
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