After years of heavy investment in the metaverse, Meta is now preparing to cut hundreds of jobs in Reality Labs, the division at the center of that effort, according to reporting from The New York Times.
The cuts are expected to impact a minimum of 10% of Reality Labs’ roughly 15,000 employees, with the final tally potentially higher. Sources say most of the affected roles sit within VR hardware and virtual social platform teams, which form the backbone of Meta’s metaverse efforts. A formal announcement could arrive today.
The move highlights Meta’s accelerating shift toward AI as its core technological priority. Internal discussions around reorganizing Reality Labs have been underway, punctuated by a memo from CTO Andrew Bosworth, who leads the division. According to The New York Times, Bosworth has called an in-person meeting for Wednesday, labeling it the “most important” of the year.
The restructuring follows December reports that CEO Mark Zuckerberg planned to cut Reality Labs’ budget by 30%, with reductions starting this month. At the time, a Meta spokesperson confirmed the company was redirecting some investment away from the metaverse and toward AI-powered glasses and wearables, citing growing “momentum” in that area.
Since Meta began breaking out Reality Labs’ results in late 2020, the division has racked up an estimated $70 to $75 billion in operating losses. The latest quarter offered little relief, with Reality Labs losing $4.4 billion on just $470 million in revenue, even as Meta’s core business delivered strong results.
Lately, Meta has been leaning harder into smart glasses, which it sees as a more down-to-earth way to bring AI to consumers. In September, the company introduced several new models, including its second-generation Ray-Ban Meta glasses.
Even with Zuckerberg’s past claims that the space could be worth trillions after 2030, and a commissioned report estimating a $760 billion lift to the U.S. economy by 2035, the whole shared-virtual-world vision never really caught on.
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