Meta to slash Metaverse budget by 30%; potential layoffs loom: Report
Meta Platforms will soon reduce resources allocated to its metaverse ambitions, according to a Bloomberg report on Thursday.
The report added that the Mark Zuckerberg-led company plans to cut 30% of next year’s budget for the metaverse group, which includes Meta Horizon Worlds and its Quest virtual reality unit.
These cuts could include layoffs as early as January next year, the report said, citing people familiar with the matter.
The news comes in contrast to the comments made by Meta's chief technology officer and head of Reality Labs, Andrew Bosworth, in January, who expressed optimism that the coming year would be one of the most important ones in the history of Reality Labs, the business and research unit of Meta Platforms.
The development comes as the company prepares its annual budget for 2026, which included planning sessions at Zuckerberg’s Hawaii estate last month. As in previous years, he asked executives to search for budget trims of about 10% across all departments.
The report also mentioned that the majority of the cuts would affect the VR division, with additional reductions planned for Horizon Worlds.
The metaverse efforts sit within Reality Labs, the division responsible for long-term hardware bets such as VR headsets and AR glasses. Since early 2021, Reality Labs has accumulated over $70 billion in losses, according to Bloomberg.
Investors have long criticised the metaverse initiative as a costly distraction, while regulators have raised concerns about child safety and data protection in Meta’s virtual environments.
Meanwhile, in July, ET reported citing The Verge that Meta laid off employees in its Reality Labs division, particularly affecting teams within Oculus Studios and hardware development, the Verge reported.
These latest layoffs followed a broader round of job cuts in February, when Meta reduced its workforce by nearly 3,600 roles—about 5% of its global headcount—citing performance-related concerns. The downsizing aligns with CEO Mark Zuckerberg’s push to build a leaner, more agile organisation.
Also Read: Money isn’t everything: Meta’s Superintelligence Labs roundly rejected by some despite tempting pay offers
The company recently established the Meta Superintelligence Lab, roping in renowned techies like Alexandr Wang, former CEO of Scale AI, and Nat Friedman, former GitHub CEO, as well as top engineers and research talent from competitors like OpenAI and Apple to push aggressive investments in AI infrastructure and talent.
The report added that the Mark Zuckerberg-led company plans to cut 30% of next year’s budget for the metaverse group, which includes Meta Horizon Worlds and its Quest virtual reality unit.
These cuts could include layoffs as early as January next year, the report said, citing people familiar with the matter.
The news comes in contrast to the comments made by Meta's chief technology officer and head of Reality Labs, Andrew Bosworth, in January, who expressed optimism that the coming year would be one of the most important ones in the history of Reality Labs, the business and research unit of Meta Platforms.
The development comes as the company prepares its annual budget for 2026, which included planning sessions at Zuckerberg’s Hawaii estate last month. As in previous years, he asked executives to search for budget trims of about 10% across all departments.
The report also mentioned that the majority of the cuts would affect the VR division, with additional reductions planned for Horizon Worlds.
The metaverse efforts sit within Reality Labs, the division responsible for long-term hardware bets such as VR headsets and AR glasses. Since early 2021, Reality Labs has accumulated over $70 billion in losses, according to Bloomberg.
Investors have long criticised the metaverse initiative as a costly distraction, while regulators have raised concerns about child safety and data protection in Meta’s virtual environments.
Meanwhile, in July, ET reported citing The Verge that Meta laid off employees in its Reality Labs division, particularly affecting teams within Oculus Studios and hardware development, the Verge reported.
These latest layoffs followed a broader round of job cuts in February, when Meta reduced its workforce by nearly 3,600 roles—about 5% of its global headcount—citing performance-related concerns. The downsizing aligns with CEO Mark Zuckerberg’s push to build a leaner, more agile organisation.
Also Read: Money isn’t everything: Meta’s Superintelligence Labs roundly rejected by some despite tempting pay offers
The company recently established the Meta Superintelligence Lab, roping in renowned techies like Alexandr Wang, former CEO of Scale AI, and Nat Friedman, former GitHub CEO, as well as top engineers and research talent from competitors like OpenAI and Apple to push aggressive investments in AI infrastructure and talent.
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