Roblox, one of the leading metaverse platforms, has recently downsized its talent acquisition division, resulting in the layoff of 30 employees.

As the metaverse market becomes increasingly crowded, Roblox has shifted its focus from expansion to revenue. A Roblox spokesperson explained, “The aggressive growth targets Roblox was operating against in the past few years required a heavier investment in our TA organization. With our commitment to getting our cash compensation growth in line with our bookings growth by the end of Q1 2024, we now need a smaller Talent Acquisition organization to meet our adjusted hiring needs. This action is the result of the reduction in our hiring targets to better align with our growth goals.”

In a recent earnings call, CFO Michael Guthrie mentioned the company’s efforts to cut costs and achieve leverage across various areas, including a slowdown in hiring. The company aims to see improvements in cost of goods sold and compensation expenses.

Trouble in the Metaverse?

Although Roblox continues to be popular among consumers with an average of 66 million daily active users, its consumer spending has declined. Average bookings per daily active user decreased by 3% in Q2 2023, reaching $11.92. Additionally, the company reported a net loss of $282.8 million in Q2 2023, compared to $176.4 million in Q2 2022.

Roblox has also faced challenges related to how it compensates its creators. While item creators traditionally receive 50% of the revenue, purchases made in a different in-game “experience” result in the item creator receiving only 20%, while the experience developer receives 30%. Roblox’s attempt to enforce a pop-up directing users to the item creator’s page for purchases has faced backlash from creators of “Wardrobe Experiences,” who argue that it could negatively impact their games.

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