In another consequence of Meta's ongoing cost-cutting strategy, the company has decided to divest its DM automation service, Kustomer, which it acquired in 2020. Meta will retain a minority stake in the platform.
Kustomer is recognized for its AI-driven detection of customer inquiries, which it responds to autonomously based on context or redirects to human service agents as needed.
Meta initially intended to incorporate Kustomer into its DM customer service tools, with WhatsApp business as the focal point. However, given the sweeping cost-cutting measures that have led to thousands of layoffs and the suspension of various projects, the Kustomer integration has been abandoned. Instead, Meta aims to concentrate on advancing its business tools within WhatsApp.
As stated by Kustomer: "Today is a significant day for Kustomer as we start our next journey as an autonomous company. We're geared up for further success, supported by our original partners who have invested $60M to fuel Kustomer’s expansion for the foreseeable future. Above all, our dedicated team of professionals, passionate about our mission to revolutionize the customer experience, remains our greatest strength."
Despite separating from Meta, Kustomer anticipates a growth surge:
"Our journey with Meta was incredible, and we're proud of our joint efforts to revolutionize business-customer support. Our partnership enabled us to expand our global offerings, enhance our AI capabilities, and deepen our integration with Meta’s modern communication channels (Instagram, WhatsApp, Messenger)."
Kustomer's potential to become a valuable DM service tool, tied into Meta’s DM offerings, still exists. The difference is, it won't be a directly integrated service. However, DMs continue to be a key area for Meta as user trends evolve.
While this move may seem like a significant shift, it is an expected outcome given the economic downturn and Meta’s relentless focus on developing the metaverse. Meta’s Reality Labs VR/AR department reported a Q1 '23 operating loss of $3.99 billion, putting it on pace to surpass last year's loss of $13.7 billion.
Given such losses, Meta is compelled to rationalize its expenditures, and Kustomer's divestment is a direct result of this cost-focused strategy.
In the short term, as Meta strives to actualize its vision, will this decision pose challenges? Meta seems confident in establishing its business messaging tools without Kustomer's platform. As noted, it continues to develop its WhatsApp business tools, which will reportedly include more AI features soon.