Meta's recent adjustments to its metaverse business division on the other side of the Pacific Ocean have impacted its Chinese partner, Goertek Inc.
Recently, several former and current employees of Goertek revealed that the company has recently initiated workforce optimization adjustments. The budget for all centers under the Goertek Innovation R&D Center, Alpha Labs (referred to as Goertek Labs), has been cut, and they will face multiple rounds of layoffs.
Regarding the reason for these layoffs, many employees directly stated it is "related to Meta's order cuts," adding that "the workforce optimization ratio in some departments or centers is between 30% and 50%." However, employees did not provide a clear answer regarding the specific proportion of the order cuts.
Previously, Meta announced adjustments to its metaverse business, confirming a reduction in resource allocation. According to informed sources, this order reduction by Meta could potentially cause losses exceeding ten billion yuan for Goertek. Goertek has not directly responded to the aforementioned impact.
The collective budget cut for Goertek Labs has initiated multiple rounds of layoffs.
The origin of the incident traces back to Meta.
Recently, foreign media reported that Meta is adjusting its metaverse business and has begun large-scale elimination of over 1,000 positions in Reality Labs. Last month, Meta had already confirmed it would reduce its resource investment in the metaverse.
As early as 2020, Goertek secured the exclusive supply contract for the Meta Quest 2 and was deeply involved in the R&D, design, and production of the client's VR devices. Although Meta has promoted diversification of its VR headset supply chain in recent years, introducing suppliers like Longcheer and Huaqin, which directly led to a reduction in Goertek's share of OEM business for this category, Goertek remains a core supplier of VR headsets for Meta.
Public information shows that Goertek's Alpha Labs is an internal core R&D department, serving as the main base for promoting technological innovation and product design in areas like VR/AR/MR, optics, micro-displays, and artificial intelligence for Goertek, holding significant authority in the company's innovation and R&D sphere.
Informed sources revealed that Goertek Labs currently has over 1,600 employees, with multiple R&D centers under it engaged in exploratory research across various fields. However, due to the extensive impact caused by Meta's order cuts—potentially causing the company losses exceeding ten billion yuan—award applications have been cancelled for all Goertek Labs staff, and "promotions and salary increases" have also been cancelled.
"Budgets for all centers under Goertek Labs have been cut; one batch of personnel will be laid off before the Chinese New Year, and another batch after," the source said.
Another recently departed Goertek employee also confirmed this account, stating directly that "the layoffs are indeed affected by Meta's order cuts." They indicated that different departments are affected to varying degrees, and the adjustment statuses are not uniform. "Some centers have been cut by 30%, some by 50%. Leadership said they need to 'cut to the bone'."
Furthermore, a long-time Goertek employee mentioned, "Having been with the company for many years, I've experienced at least three rounds of layoffs, and this recent wave has started again." Besides Goertek Labs, each department at Goertek may see adjustments of around 10% of its personnel.
As a long-term, in-depth partner in Meta's metaverse strategy, it is somewhat expected that Goertek would be affected in this round of adjustments. According to relevant personnel, based on internal reflection and calculations at Goertek, "this order reduction may cause Goertek losses exceeding ten billion yuan."
However, regarding the layoffs and related matters caused by Meta's order cuts, personnel from Goertek's securities department only responded by stating, "Due to confidentiality agreements with clients, details regarding order changes cannot be disclosed externally."
Growth in the smart hardware segment is weakening, and order cuts exacerbate the decline.
Currently, Goertek's main businesses are divided into three categories: precision components, intelligent acoustic整机 products, and smart hardware. These have long maintained proportions of approximately 15%, 25%, and 60%, respectively, of the company's total revenue.
Among the three major businesses, Goertek's smart hardware segment, which contributes the highest revenue share, primarily includes VR virtual reality products, MR mixed reality products, AR augmented reality products, AI smart glasses, and smart wearable products. The business model mainly involves cooperation with industry clients through ODM and JDM models. The related business with Meta, such as VR headsets and AI glasses, also falls primarily under this segment.
It was noted that after Goertek secured the exclusive supply contract for Meta Quest 2 in 2020, the revenue from Goertek's smart hardware business grew by 107.34% that year. Subsequently, in 2021 and 2022, it achieved growth rates of 85.87% and 92.27% respectively. This business thus transformed from the company's third-largest segment into its primary business, rapidly increasing its share of the company's revenue.
Entering 2023, the revenue from Goertek's smart hardware business began to show a significant decline, shifting from a year-on-year increase of 92.27% in the previous year to a decrease of 6.93%. This was followed by a 2.57% decline in 2024, and by the first half of 2025, it maintained only a微弱 growth of 2.49%.
It is noteworthy that during the period of rapid growth in Goertek's smart hardware performance from 2020 to 2022, Goertek's overseas revenue also achieved considerable growth. However, in 2023 and beyond, alongside the slowdown and even decline in the smart hardware business, the growth rate of Goertek's overseas business also experienced a year-on-year decline.
Goertek has previously experienced a "black swan" event due to order cuts. According to a Goertek announcement in 2022, "affected by a certain major overseas client (suspected to be Apple) suspending production of整机 products," the company incurred direct losses and asset impairments of approximately 2-2.4 billion yuan in 2022, significantly impacting its performance that year. Now, with the occurrence of Meta's order cuts, a "black swan" event may be descending once again.
According to Jiang Bin, Chairman of Goertek, over the past five years, Goertek's cumulative R&D investment has reached 24.5 billion yuan. These funds have primarily flowed into 14 provincial-level and above R&D platforms, including the National Virtual Reality Innovation Center. It is precisely these massive investments that have secured Goertek its current 80% share of the global MR headset shipment volume and approximately a 50% share of the global AI smart glasses shipment volume.
Now, with the changing attitudes of global tech giants like Apple and Meta towards MR and even the metaverse, a dose of cold water has undoubtedly been thrown on the development of this track. This also implies that the multiple AR/MR core technologies Goertek previously invested heavily in developing might not yield a favorable return on investment for the company in the short term.
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