Mark Zuckerberg is facing growing calls to focus less on the metaverse and slash the budget of the tech giant's Reality Labs division.

It comes after Meta posted some dismal earnings of $4.4 billion in the third quarter…down 52% compared to the same period a year ago.

Meta's share price plunged 20% in after-hours trading Wednesday night as investors digested the news, with critics arguing that Zuck's ambitious gamble on the metaverse isn't working.

The embattled company, which owns Facebook, Instagram and WhatsApp, has been struggling with a slowdown in ad revenue as younger consumers flock to TikTok.

Zuckerberg announced that Facebook would change its name to Meta last year to reflect its push into virtual reality, and it currently spends $10 billion a year in the metaverse.

But the fruits of this investment have yet to be reaped, and between July and September alone, Reality Labs suffered a staggering $3.67 billion in losses.

To make matters worse, the company has warned that these operating losses will only increase next year, leading some analysts to declare enough is enough.

Meta has recently been rocked by a series of reports revealing that Horizon Worlds, its flagship metaverse, is on "quality lock."

According to The Verge, things have gotten so bad that even Meta developers aren't using it, prompting furious notes from executives.

This was followed by a Wall Street Journal report revealing that the company has cut its monthly active user target from 500,000 to 280,000. Despite that, it only attracted 200,000.

'Oversized and terrifying'

Analysts now use harsh terms when describing their displeasure with Meta's bid for virtual reality, calling the losses "massive and frightening."

And some shareholders are now writing directly to Zuckerberg, begging him to slash the tech giant's spending on the metaverse.

Altimeter Capital CEO Brad Gerstner has called for Reality Labs' budget to be cut in half to $5 billion and warned:

The meta has shifted into the land of excess: too many people, too many ideas, too little urgency... This lack of focus and aptitude is obscured when growth is easy, but deadly when growth slows and technology changes.

Other analysts have warned that some of the pressing issues facing Facebook and Instagram are being ignored, and Meta desperately needs to turn its business around. Insider Intelligence analyst Debra Aho Williamson said:

Like Facebook Inc., it was a revolutionary company that changed the way people communicate and the way marketers interact with consumers. Today it is no longer so innovative

The results were not pessimistic, as Facebook's monthly active users increased 2% year over year to 2.96 billion. When you add Instagram and WhatsApp as well, a total of 3.71 billion are using the Meta apps, an increase of 4%.

Defensive Zuckerberg

Despite countless critics questioning the company's "experimental bets," Zuckerberg defended its strategy, suggesting that skeptics were being short-sighted.

It would be a mistake on our part not to focus on any of these areas that will be fundamentally important for our future.

He went on to insist that Meta is doing a "leading job" and that its cutting-edge products will mature "at different time periods over the next five to 10 years."

However, there is no escaping the fact that Meta VR headsets, which offer the best experience in the metaverse, are incredibly expensive.

Its newly introduced Quest Pro product costs $1,500, and PP Foresight analyst Paolo Pescatore compared Meta's current strategy to "a big gamble given the economic crisis.

People aren't rushing out of their seats to buy a VR headset or even watch 360-degree videos... The new device still feels like an expensive toy