The Facebook parent company is “paying significantly more than a lot of gaming companies,” said Andiamo chief executive Patrick McAdams, whose firm recruits tech talent for big and small companies. “It’s not an exaggeration to say that their total compensation is double or more than double of what you’ll get at a large gaming company.”
“It’s not abnormal to be $500,000 plus,” said McAdams, who added the highest packages were often awarded to highly-skilled developers or technical team leaders.
The eye-popping compensation packages are just a sliver of the multibillion dollar investment the company is making to build the so-called metaverse, seemingly realistic computer-generated spaces in which users interact with one another. Meta chief executive Mark Zuckerberg has theorized virtual reality-powered headsets, augmented reality powered glasses and a bevy of corresponding programs will become the next great computing platform, eventually replacing some in-person communication. The company changed its name from Facebook to Meta in 2021 to reflect these ambitions.
But Meta’s high salaries and long-term investment in the metaverse also comes amid a frenzied push to rein in costs across the sprawling company. Last month, it announced plans to lay off 10,000 workers as part of a months-long downsizing and restructuring effort as the social media giant. Those cuts follow the 13 percent workforce reduction the company made in November when it slashed 11,000 jobs in the first widespread layoffs in the company’s history.
Zuckerberg has dubbed 2023 the “year of efficiency,” as he promised to trim middle management and cut superfluous projects.
Meta declined to comment.
Former Meta human resources employees say the company’s unusually high salaries for developers building virtual reality products is part of a larger trend in which the company is willing to outspend competitors to lure the best talent for a wide range of jobs.
“They pay way above market rate for a lot of roles,” one former Meta recruiter said. And “if we provided an offer … there wasn’t a lot of competition.”
Meta, whose business heavily relies on digital advertising, has been trying to overcome severe economic challenges. The company is facing intensifying competition for advertising dollars and users from new rivals such as the short-form video network TikTok. New privacy rules from Apple, the war in Ukraine and rising inflation has created market instability, prompting some digital advertisers to pull back on spending on social media ads.
“I think the mind-boggling spending on metaverse complicated the execution and strategy issues that Facebook was facing in a volatile macro-environment,” said Dan Ives, a financial analyst with Wedbush Securities. “The digital media head winds were exacerbated because the company was spending on 30 to 40 different projects, many of which were not around social media.”
Meta’s newest efforts to become leaner and more efficient is part of a larger wave of tech companies that are laying off their workers and cutting projects in the face of new economic pressures. Tech giants such as Google, Amazon and even Apple have all slashed jobs in recent months along with a cadre of Silicon Valley start-ups. Over the last two years, the tech industry has shed at least 332,614 jobs, according to Layoffs.fyi, a website that tracks layoffs in the tech industry.
Zuckerberg has said he ramped up the company’s investments during the pandemic because he believed overly optimistic projections that the e-commerce market would continue to skyrocket — bringing in more advertising revenue — after the threat of the coronavirus pandemic subsided.
Overall, Meta said last year that 20 percent of its spending is geared toward Reality Labs, the division at Meta that is responsible for building its metaverse products. That division lost more than $13.7 billion last year — up from the $10.2 billion it lost in 2021, according to company regulatory filings.
Meta has found plenty of ways to spend the money. Last year, the company debuted a high-end virtual reality-powered headset, Quest Pro, for a price of $1,500. The headsets, which received mixed reviews from critics, were targeted at corporate workers and businesses as a collaboration tool.
Meta is also investing in research to improve the underlying technology of its devices to offer users a more realistic sense of presence in the metaverse. The company has bought up at least seven virtual reality studios to improve the range of apps available on its devices. Days before the company renamed itself from Facebook to Meta in October 2021, it announced a plan to hire 10,000 new highly-skilled jobs within the European Union over the following five years — including workers to help shape the metaverse.
Meta has said it will take years for its metaverse ambitions to come to fruition in part because it’s still developing the underlying technology. The company is still trying to create glasses capable of projecting computerized images onto the real world. And Meta is still conducting research to make the physical world and the virtual world seem indistinguishable to users of its virtual reality headsets. So far, Meta’s existing headsets are struggling to gain mainstream popularity.
While the Menlo Park, Calif.-based company has indicated it may make cuts in Reality Labs, the company hasn’t backed away from the metaverse bet or its willingness to pay handsomely for talent.
Virtual reality developers who were offered jobs at Meta over the last nine months were in the top 90 percentile in terms of total compensation earned an average of $538,800, according to data from Levels.fyi, which tracks salaries in the technology industry. That figure was higher than the $495,400 Apple paid its highest earning developers and the $440,000 Google paid its VR programmers, the data showed. Apple, Google and Meta all paid comparable base salaries, according to the data.
Anshel Sag, an analyst at Moor Insights & Strategy who covers virtual reality businesses, said that Meta is facing more competition for talent in virtual reality because more companies are entering the market. Earlier this year, PlayStation released a new virtual reality headset. Apple is expected to unveil a similar high end device later this year, according to media reports.
“The demand has gone [up mostly because] there’s a lot of companies that are anticipating for Apple’s launch,” Sag said.
In general, Meta tends to give its workers higher total compensation packages, which often include stock and bonus options, than its competitors, the data showed. Meta’s stock has experienced volatility over the last year and half, creating uncertainty for workers and candidates about their total pay. And some of the company’s reputational crises such as the Cambridge Analytica scandal and revelations that Russian-based operatives used Facebook to influence the 2016 presidential election have made it more difficult for the company to hire talent.
One smaller gaming company executive said he lost the opportunity to hire a senior developer last year because the candidate said Meta had offered $800,000 a year with the potential to earn more than $1 million if he or she got a high performance bonus.
“This candidate was a senior [developer who didn’t have] super unique experience [or] skills,” said the executive, who requested anonymity to speak about internal matters. “Facebook was doing pretty wild stuff a year ago.”
