Meta’s Reality Labs Job Cuts

Meta, the parent company of Facebook, is expected to cut approximately 10% of its personnel in the Reality Labs division this week. This decision follows a strategic shift to emphasize artificial intelligence (AI) development as the company navigates a dwindling budget aimed at its metaverse initiatives.

According to a report from the New York Times on Monday, the announcement may be made as early as Tuesday, with sources claiming the workforce in Reality Labs, which numbers around 15,000, will see a reduction of about 1,500 positions.

The division primarily focuses on virtual reality (VR) technology, including products like headsets and the management of the metaverse platforms, Horizon Worlds and Horizon Workrooms. Recently, cuts have been made to the metaverse budget as Meta redirects investments into AI.

In December, Meta’s stock experienced a surge after rumors of a possible 30% reduction to the metaverse budget, indicating a realignment of resources towards AI projects. The NYT article further revealed plans to bolster the wearables division with funds redirected from Reality Labs, emphasizing smart technologies like smart glasses.

Formerly recognized as Facebook, the company rebranded to Meta in October 2021, marking a transformative pivot towards immersive environments and augmented reality. Since the establishment of Reality Labs in August 2020, Meta has faced significant financial losses exceeding $70 billion, with a reported operational loss of $4.4 billion in the third quarter of 2025.

Despite the current downsizing in the metaverse sector, CEO Mark Zuckerberg remains optimistic about its future, previously identifying 2025 as a critical year for growth in this industry.