Meta Plans To Cut 10% Of Metaverse Division

Meta is reportedly set to lay off around 10% of staff from its metaverse arm Reality Labs this week, as the firm focuses its resources on artificial intelligence. 

According to a report from the New York Times (NYT) on Monday, citing sources close to the matter, Meta could announce the cuts to the division as soon as Tuesday. 

Reality Labs has around 15,000 staff members. The division focuses on virtual reality (VR) gear such as headsets, as well as operating the firm’s metaverse platforms Horizon Worlds and Horizon Workrooms. 

The cuts are expected to hit around 10%, equating to 1,500 people.   

Cointelegraph reached out to Meta for comment.  

Meta cutting metaverse budget

Meta has been making gradual cuts to its metaverse budget over the past year as the firm ramped up its focus on artificial intelligence (AI). 

In early December, Meta’s shares spiked after reports emerged that the firm was potentially slashing 30% from its metaverse budget and reallocating the funds to AI.   

The NYT report also states that Meta plans to reallocate some of its money from Reality Labs to increase the budget of its wearables division, which focuses on smart glasses and wrist-worn devices such as the Meta Neural Band. 

The firm, formerly known as Facebook, changed its name to Meta in October 2021 as part of a major pivot from social media to the metaverse, VR and augmented reality.  

Meta has lost over $70 billion on Reality Labs since the unit was launched in August 2020, with the arm posting $4.4 billion worth of operation losses in Meta’s last financial earnings report from Q3 2025.  

Related: CFTC forms innovation committee to help shape rules for crypto, AI

At the time, the metaverse was one of the most trending sectors in crypto and traditional tech, user adoption has failed to hit mainstream levels. 

Currently, gaming-oriented metaverse platforms such as Roblox and Fortnite dominate the market, with hundreds of millions of active daily users. However, these platforms are outliers, with the rest of the sector having minuscule usage metrics in comparison.