Meta layoffs slash Reality Labs workforce as Zuckerberg pivots hard from metaverse to AI

Meta Is Reportedly Laying Off Hundreds of Metaverse Employees This Week

Meta CEO Mark Zuckerberg (Credit: David Paul Morris/Bloomberg via Getty Images) Mass tech layoffs repeatedly grabbed headlines in 2025, and early signs suggest the trend may continue this year. Meta is reportedly set to lay off hundreds of employees in its Reality Labs division. The division currently employs around 15,000 people, and about 10% are set to lose their jobs this week, sources tell The New York Times. Reality Labs oversees the work on Meta's AR/VR glasses, and it is led by the company's CTO Andrew Bosworth. The job cuts are expected to be announced at a meeting on Wednesday. According to an internal memo viewed by the Times, Bosworth has requested the presence of all staffers in person and labeled it as the "most important" meeting of the year. Last year, Meta fired more than 20 employees for leaking similar information to the press. The news arrives after Bloomberg reported last month that Meta was planning to slash its metaverse budget by 30% and direct savings towards the development of Reality Labs' own AI glasses and wearables. The Ray-Ban Meta smart glasses have been a major hit for the company, with over 2 million units sold by Q2 2025. The metaverse, on the other hand, has failed to find its footing. Meta has reportedly lost over $70 billion on the project in the past four years and has begun pivoting toward other projects. Notably, in 2021, CEO Mark Zuckerberg was so confident about the project that he renamed the company after it. Meanwhile, on Monday, Zuckerberg launched a new initiative to boost the company's AI infrastructure, called the Meta Compute. The goal is "to build tens of gigawatts this decade, and hundreds of gigawatts or more over time," Zuckerberg said.

Meta retreats from metaverse after virtual reality check

Imagine changing your popular brand to capitalize on an emerging tech trend that never emerged. Mark Zuckerberg did just that, and now Meta is backing away from the virtual reality business in which it invested billions. In 2025, Meta's Reality Labs division, responsible for the company's various VR projects, posted a $4.2 billion loss in the first quarter. AI is in, the metaverse is out, and around 1,000 jobs are reportedly being shed from Reality Labs. A decision to end the sale of Meta Quest headsets to businesses is further evidence of Meta's pivot. In an update, Meta wrote: "We are stopping sales of Meta Horizon managed services and commercial SKUs of Meta Quest, effective February 20, 2026." For existing customers, Meta Horizon services licenses will become free, and those with Meta Quest 3 and 3S headsets will be able to access the services until January 4, 2030. The company also announced that Meta Horizon Workrooms would be discontinued, with users given until February 16 to make alternative arrangements. Horizon Workrooms, a virtual reality conferencing system, was introduced in 2021 and failed to set the world alight. At the time, Rupert Goodwins, writing for The Register, said: "It encapsulates a paucity of imagination and self-awareness that goes beyond the risible and the banal into the truly horrific." Meta's abrupt shuttering of the service further demonstrates the change in direction amid weakened demand for headsets. Figures for 2025 showed a marked decrease in appetite for VR, with Apple's considerably pricier Vision Pro devices also struggling. The future of Meta's virtual reality ambitions now rests largely with consumers. The immersive virtual worlds that prompted Zuckerberg to push through the rebrand feel more remote than ever. Instead, Meta is betting on AI as bulky headsets become things of the past. ®

Meta Plans to Cut 10% of Jobs at Company's Reality Labs Division

Meta Platforms Inc. plans to cut 10% of jobs in the company's Reality Labs division, part of a broader strategy to shift money away from some virtual reality products and into other AI wearables. The cuts are expected this week, according to a person familiar with the company's plans who wasn't authorized to speak publicly. Chief Executive Officer Mark Zuckerberg asked executives to look for budget reductions within the Reality Labs division late last year, including cuts to some of the company's virtual reality and metaverse products, Bloomberg News previously reported.

Meta's VR layoffs, studio closures underscore Zuckerberg's massive pivot to AI

Andrew Bosworth, chief technology officer of Meta Platforms Inc., speaks during a Bloomberg Television interview on the sidelines of the Meta Connect event in Menlo Park, California, US, on Wednesday, Sept. 25, 2024. Meta's decision to scale back its VR efforts comes 12 years after Facebook entered the market with the $2 billion purchase of Oculus VR. Since late 2020, Meta's Reality Labs division has logged over $70 billion in cumulative losses. In its latest quarterly earnings in October, Meta said Reality Labs recorded a $4.4 billion loss on $470 million in sales. Meanwhile, the company is wrestling with a scattershot AI strategy as it tries to keep pace with OpenAI and Google, whose large language models and AI features are soaring in popularity. Meta plans to release its next frontier model, codenamed Avocado, in the first quarter of this year, CNBC reported last month. Meta's stock price badly trailed Alphabet's last year and came up short of the Nasdaq, a trend that's continued in the early days of 2026, with the shares down more than 4% since the calendar changed. Horizon Worlds has been a struggle from the start. In August 2022, 10 months after Zuckerberg announced plans to go all-in on the metaverse, he posted a photo to his Facebook profile showing his avatar in front of animated versions of the Eiffel Tower and Spain's Basílica de la Sagrada Família. The picture was lambasted on social media for its low-quality graphics. Zuckerberg posted a new image days later of an improved version of his avatar, promising users that "major updates to Horizon and avatar graphics" were coming soon. But inside Horizon Worlds, the photo fiasco was a defining moment, according to people familiar with the matter. Zuckerberg called a meeting with the team responsible for VR avatars demanding improvements, one of the people said. Multiple VR developers told CNBC that Horizon Worlds usage remains low based on their observations, adding that the company doesn't share specific stats. The developers said they're frustrated because they don't have accurate information that could help them create more compelling games and experiences. Rather, in Meta's refocusing toward a more Roblox-like experience, the company last year began instructing existing third-party Horizon Worlds developers to build kid-friendly, simplistic games. Deepak Nair, a developer advocate at Meta, discussed the strategy in August with an audience of developers in Berlin, encouraging them to mimic Roblox and Minecraft in building games that let kids create stories they can share with their friends. Nair said a key issue for developers is identifying the right demographic. "Generally 13 to 24, right?" Nair said. "And even on other ecosystems, it's even younger than that." In February, Meta launched a $50 million Creator Fund intended to entice developers to create more in-game experiences inside Horizon Worlds, with a focus on mobile. The company is planning to make it easy for Facebook and Instagram users to seamlessly access Horizon Worlds, sources said.

Meta to lay off hundreds in Reality Labs amid shift from metaverse to AI

Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. In a nutshell: Remember how much faith Mark Zuckerberg had in the metaverse? He even renamed his company after the concept of a shared VR social platform. That was before AI became the tech industry's new obsession, of course. As a result of these shifting priorities, Meta is preparing to lay off hundreds of employees in its Reality Labs division this week. The cuts are expected to affect 10% of Reality Labs' approximately 15,000 employees, reports The New York Times, which cites three people with knowledge of the discussions. The publication says that the final figure could be even higher. The vast majority of those losing their jobs are working in the Metaverse unit on virtual reality headsets and virtual social networks, the report said. An announcement on the cuts could come as soon as today. According to a memo obtained by the Times, Andrew Bosworth, Meta's chief technology officer who oversees the division, called a meeting for Wednesday and urged employees to attend in person. He described it as the "most important" meeting of the year. Since Meta started reporting Reality Labs' revenue in Q4 2020, the division has reported total operating losses of around $70-75 billion (not million). It was more of the same in its most recent quarter: despite Meta posting strong results, the division reported $4.4 billion in losses on $470 million in revenue. News of the job losses doesn't come as a surprise. It was reported in December that Zuckerberg was planning to slash Reality Labs' budget by 30%, with the cuts starting this month. A spokesperson confirmed at the time that the company was shifting some of its investment from the Metaverse group toward AI glasses and wearables as it looked to capitalize on the "momentum" in the segment. Meta has placed a lot of effort into its smart glasses products recently. In September, the company unveiled the second-generation Ray-Ban Meta, the Oakley Meta Vanguard, and the Meta Ray-Ban Display. Even before the influence of AI, it never looked like the Metaverse was going to live up to Zuckerberg's expectations. The CEO repeatedly said that the industry would be worth billions or even trillions of dollars after 2030 - Meta even commissioned a report in 2023 that claimed the metaverse could contribute $760 billion to the US GDP by 2035. But most people treat the idea of a shared virtual universe with indifference at best. Zuckerberg might even be relieved that the AI revolution has come along. It gives him an excuse to shutter his Metaverse projects instead of watching them lose billions more dollars as they fail to gain interest.

Meta Plans to Cut 10% to 15% of Employees in Reality Labs Business

Meta plans to cut around 10 percent of the employees in its Reality Labs division who work on products including the metaverse, according to three people with knowledge of the discussions, as the company shifts priorities to build next-generation artificial intelligence. The cuts to Reality Labs -- which has roughly 15,000 employees -- could be announced as soon as Tuesday. The layoffs would be a fraction of Meta's total work force of 78,000, but are set to disproportionately affect those in the metaverse unit who work on virtual reality headsets and a V.R.-based social network, said the people, who asked not to be named since they were not authorized to discuss confidential decisions. The cuts could end up affecting more than 10 percent of the division, one of the people said. Andrew Bosworth, Meta's chief technology officer who oversees Reality Labs, has called a meeting for Wednesday and has urged staff to attend in person, according to a memo sent to employees last week, which was obtained by The New York Times. Mr. Bosworth said the meeting was the "most important" of the year but did not elaborate. Mark Zuckerberg, Meta's chief executive, asked top executives last year to make cuts to their 2026 budgets while he pours money into A.I. research. As Meta faces competition from companies like OpenAI and Google, Mr. Zuckerberg has increased the budget for TBD Lab, the skunk works unit at Meta that aims to build superintelligence, a godlike A.I. system. The company also plans to reallocate some of the money from virtual reality products to increase the budget for its wearables division, which builds smart glasses and wristband computing devices. The layoffs are set to pump the brakes on building virtual reality for the metaverse, Mr. Zuckerberg's far-flung vision of what social networking could look like in a V.R.-based version of the internet. He has chased that vision since 2014, when he bought Oculus, a virtual reality start-up that became the foundation for Meta's hardware division. In 2021, Mr. Zuckerberg rebranded the company Meta, officially moving away from its Facebook name. But consumers have not flocked to buy Meta's virtual reality headsets, even as the company has spent tens of billions of dollars building them. At the same time, investors have grown wary of Meta's spending as it has ratcheted up its work on artificial intelligence. The company expects to invest tens of billions of dollars on data centers, the computing facilities that power A.I. development, and it has handed out lavish pay packages to hire top A.I. researchers. Meta declined to comment. In December, a company spokeswoman said Meta was "shifting some of our investment from Metaverse toward A.I. glasses," and was not planning "any broader changes." Mr. Bosworth's memo was earlier reported by Business Insider. Even as the A.I. race has ramped up, Meta has said it is not giving up on the metaverse. But the Silicon Valley company appears to be redefining exactly what that might look like. The Reality Labs division that works on augmented reality, which builds hardware like glasses and wristbands that allow people to interact with computing menus and commands using voice and gesture commands, is expected to be largely spared from the cuts, two of the people said. That division is responsible for Meta's Ray-Ban sunglasses, which have incorporated a camera and personal A.I. assistant. The glasses have been a surprise hit, selling more than two million units over the past few years, the company has said. The augmented reality division is also responsible for the Ray-Ban Display smart glasses, which have a digital menu inside the lenses that can be navigated with a hardware wristband. At an industry event in Las Vegas last week, Meta said it was delaying the rollout of the Display glasses internationally, citing limited inventory and "unprecedented demand." On a call with investors in July, Mr. Zuckerberg said the smart glasses would be "the main way that we integrate superintelligence into our day-to-day lives."

Meta Reportedly Cutting About 1,500 VR and AR Jobs Amid Renewed Push to Become an AI Juggernaut

According to an anonymously-sourced New York Times article, as early as Tuesday Meta will announce that about 10% of the workers in the company’s Reality Labs division are set to lose their jobsâ€"about 1,500 people in a division of about 15,000. Reality Labs was once Oculus, the VR headset company founded by Palmer Luckey, originally funded through a Kickstarter campaign. Since being acquired in 2014 by what was at the time called Facebook, Oculus has evolved into the “virtual and augmented realityâ€-focused division of Meta. It makes headsets and the Ray-Ban Stories smart glasses along with VR and AR software, including the Horizon Worlds social networking platformâ€"what's left of it, anyway. The Times says Meta CTO Andrew Bosworth has called for a meeting of Reality Labs staff members on Wednesday that he has deemed the “most important†meeting of the year, and indicated that employees are meant to attend in person. From the sound of it, this meeting will be held the day after the layoff plan is officially made public. My Gizmodo colleague James Pero strongly implied last month that something like this was coming, noting that a planned 30% budget cut at Reality Labs was, if not the death knell for the metaverse project at Meta, then a least a clear shift in priorities to AI. And indeed, on Monday Meta announced a massive buildout plan for data center capacity called Meta Compute, aimed at building “tens of gigawatts†of AI compute before the end of the 2020s. Compute buildout is somewhat crudely measured in gigawattsâ€"roughly the power usage of a major U.S. city. So Meta's rather vague “tens of gigawatts†of compute projection translates to “enough data centers to use more than ten San Franciscos’ worth of electricity, but less than one hundred San Franciscos.†Also on Monday, Meta announced something sure to help smooth over the friction involved in all this AI data center construction: the hiring of Dina Powell McCormickâ€"a former advisor to Republican presidents George W. Bush and Donald Trump, who has also worked as a banking executiveâ€"to be Meta’s new president and vice chairperson. "How we engineer, invest, and partner to build this infrastructure will become a strategic advantage," CEO Mark Zuckerberg wrote in a statement. Zuckerberg also used the term “strategic advantage†in 2022 to explain his push for more metaverse-related technology. “Enabling more experiences is really the primary driver and then the sort of fortification against external risks is certainly a strategic advantage over the long-term," he said at the time.

Meta Lays Off Thousands of VR Workers as Zuckerberg's Vision Fails

After years of failing to produce a profitable augmented reality platform, Mark Zuckerberg's Meta is pounding one of the final nails into the coffin of its metaverse efforts -- the ones that were once so central to its vision that it renamed the entire company after them. This week, the Wall Street Journal reported Meta was laying off some 1,500 employees from its Reality Labs division, the department working on Meta's virtual reality products. As part of the layoffs, three VR game studios were shuttered, though Horizon Worlds -- Meta's online VR game platform -- is still running, per IGN, albeit in a diminished capacity. Overall, the layoffs impact nearly 10 percent of the division's total staff, drastic cuts which come as part of the company's shift away from virtual reality toward AI devices, like its AI smart glasses. "We said last month that we were shifting some of our investment from Metaverse toward wearables," a spokesman for Meta told the WSJ. "This is part of that effort." The layoffs are unfortunate news for the workers who will now be forced to navigate one of the worst job markets since 2003. On the other hand, it's kind of astonishing that Meta even opted to field such a massive virtual reality team for so long. Back in early December, the WSJ previously reported that Meta's Reality Labs had lost the company over $77 billion since its inception in 2020. The company's decision to finally pull the plug on the ailing metaverse -- after rebranding as "Meta" from Facebook in 2021 -- was seen by industry analysts as a "smart move, just late." (Even Zuckerberg himself began to shy away from the metaverse in earnings calls as early as 2023, as the whole project crumbled.) All that said, it remains to be seen if the push toward AI-powered "wearables" is any more successful than Zuckerberg's infamous foray into virtual reality. Last week, Meta had to pause international shipments of its AI smart glasses due to inventory problems, as analysts warn that international privacy regulations and an oversaturated market could limit their sales overall. Not to be deterred, Bloomberg recently revealed that Meta execs had discussed whether to double the total production run of the AI specs, from 10 million units to 20 million. A source familiar with the matter told the publication that production could reach as many as 30 million units by the end of 2026, assuming demand justifies the supply bump. So while the future of the AI smart glasses remains uncertain, one thing's for sure: the metaverse, in all its clunky glory, is winding down for good.

How Meta's Latest Job Cuts Compare to Recent Broader Tech Sector Layoffs - Decrypt

The move is modest compared with broader tech layoffs in 2025, which eased late in the year. Meta Platforms, the parent company of Facebook and Instagram, has cut about 1,000 jobs from its virtual reality and metaverse division Reality Labs, as it reportedly prepares to shift resources toward AI wearables and mobile features. The Menlo Park-based company announced the layoffs Tuesday morning in an internal memo from Chief Technology Officer Andrew Bosworth first seen by Bloomberg. Earlier reporting from the paper cites estimates that Reality Labs employs about 15,000 workers, making the cuts roughly 10% of the division's workforce. "We said last month that we were shifting some of our investment from Metaverse toward Wearables," Meta spokesperson Tracy Clayton wrote in a statement to state press outlet SFGate. The move was a "part of that effort," and Meta plans to "reinvest the savings to support the growth of wearables this year," Clayton added. Meta's cuts arrive as the first major tech layoff of 2026, after large workforce reductions tapered off late last year. In November 2022, Meta cut about 11,000 employees in one of the largest layoffs in its history, while CEO Mark Zuckerberg simultaneously reaffirmed the company's long-term commitment to the metaverse. The move exposed early tension between Reality Labs' mounting losses and investor pressure for efficiency, even as Meta insisted the strategy remained intact. By the end of the same year, Meta's metaverse push appeared to struggle due to weak user adoption, unclear consumer demand, and the growing financial drag of Reality Labs. As capital tightened and interest rates rose, the scale of the bet became harder to justify, setting the stage for the company's current shift away from its previously heavy metaverse investment. Still, the roughly 1,000 roles being eliminated in Reality Labs represent a small fraction of the roughly 154,000 technology job losses recorded across 2025, according to data from Challenger, Gray & Christmas. "Technology has been pivoting to both developing and implementing artificial intelligence much more quickly than any other industry. This, coupled with over-hiring over the last decade, created a wave of job loss in the industry," the research firm wrote. The tech sector led all private industries in layoffs last year, with job cuts rising 15% from 2024. Industry data compiled by Layoffs.fyi show that tech layoffs fell sharply into late 2025, dropping from 18,510 in October to 8,932 in November and to around 300 in December, as large, headline-scale workforce reductions tapered off heading into year-end. Among its FAANG peers, Meta's move appears modest in scale. Amazon accounted for the largest workforce reductions within the group over the past year, cutting tens of thousands of roles across retail, devices, and AWS through multiple rounds, per layoff data sourced from public reports. Google and Microsoft implemented smaller but recurring layoffs, generally in the low thousands per round, tied to cost controls and AI-driven restructuring, while continuing to hire selectively in priority areas. Apple largely avoided mass layoffs, relying instead on attrition and slower hiring, while Netflix made limited cuts, typically numbering in the hundreds, as it adjusted operations following changes to its password-sharing model. Records on the California Employment Development Department do not yet show that a worker adjustment and retraining notice (WARN) attributed to Meta has been filed as of Wednesday morning, per Decrypt's review. Decrypt has reached out to Meta Platforms and the California Employment Development Department for comment and will update this story should they respond.

Meta is closing 3 VR studios and laying off roughly 10% of Reality Labs as it shifts focus from the metaverse to AI wearables, it's next sure-fire, can't-miss idea

Armature Studios, Sanzaru Games, and Twisted Pixel are done for. Meta chief technology officer Andrew "Boz" Bosworth said early in 2025 that the metaverse could be a "legendary misadventure" if the company's Reality Labs division didn't turn things around that year in a big way. Well, here we are in 2026, and it looks like the mission was not accomplished: Bloomberg says Meta is beginning layoffs of more than 1,000 Reality Labs employees and closing three development studios as it shifts attention from VR and the metaverse to its next big idea, AI wearables and phone features. An internal memo viewed by Bloomberg said roughly 10% of the Reality Labs workforce will be let go in an effort to make the division "more sustainable." A Meta representative said the cuts represent part of a previously announced effort to shift investment "from metaverse toward wearables," adding, "We plan to reinvest the savings to support the growth of wearables this year." "Starting today, VR will operate as a leaner, flatter organization with a more focused road map to maximize long-term sustainability," Bosworth wrote in the memo. Reality Labs has lost a staggering amount of money over the past several years -- roughly $50 billion across 2020-2024, a revenue black hole that's only grown wider since -- without showing any evidence of an ability to produce a popular, actual useful mainstream product. Which isn't to say that the metaverse didn't give us anything memorable, just that it was, well, this: Meta will continue to work on the metaverse, according to the report, but with a focus on mobile devices rather than "fully immersive VR headsets" that were initially expected to be at the core of the experience. VR headset development will also continue, but at a reduced pace. Meta will also close three VR development studios as part of the cuts: Resident Evil 4 VR developer Armature Studios, Asgard's Wrath maker Sanzaru Games, and probably the best known of the bunch, Defector developer Twisted Pixel, whose last release was Deadpool VR in 2025. PC Gamer senior editor Wes Fenlon said all the way back in 2021 that the metaverse is bullshit and he sure wasn't wrong. A potential difficulty for Meta is that its wearables gambit risks wandering into the same minefield: $799 for a pair of glasses that look ridiculous and rely on having Meta's AI installed on your phone for functionality, a dodgy proposition in its own right. (And even when they do work, is this really the future we want?) On top of that comes the extremely obvious privacy concerns these things inevitably engender, and the potential legal headaches and lawsuits that may follow. It's possible that AI wearables will become mainstream someday, but someday soon? I wouldn't bet on it -- but I also wouldn't have sunk more than $50 billion into whatever the hell the metaverse was supposed to be.

Meta reportedly prepares new round of Reality Labs layoffs as AI takes priority - SiliconANGLE

Meta reportedly prepares new round of Reality Labs layoffs as AI takes priority Meta Platforms Inc. is reportedly planning to cut around 10% of employees at its Reality Labs division as the company shifts its priorities to artificial intelligence. The New York Times, referencing three people familiar with the matter, claims that the layoffs could be announced as soon as Tuesday and that Andrew Bosworth, Meta's chief technology officer who oversees Reality Labs, has called a meeting for Wednesday and has urged staff to attend in person, Reality Labs accounts for roughly 15,000 employees of Meta's total workforce of 78,000, meaning that around 1,500 people are expected to be laid off. Previous reports in December had suggested that Meta was planning to lay off up to 30% of Reality Labs staff. Founded in 2020, Reality Labs is the unit responsible for Meta's virtual and augmented reality efforts, including Quest headsets, Horizon Worlds and other metaverse-related software and hardware initiatives. Reality Labs has posted multibillion-dollar operating losses every year since it was founded, with Meta previously warning investors that losses would continue to grow as the company invested heavily in immersive technologies. Despite the best of intentions, virtual reality and so-called metaverse experiments have failed to gain mainstream adoption and use, an outcome that is not surprising given that VR, in one form or another, has been meant to be the next big thing since the 1990s. The reported layoffs come as Meta shifts its broader focus toward artificial intelligence. Initiatives have included AI-powered recommendations across Facebook and Instagram, the open-source Llama large language model family and building AI infrastructure, including custom chips and data center capacity. The job cuts come after Meta previously laid off more than 100 Reality Labs staffers in April. Meta also laid off 600 AI workers from its Superintelligence Labs unit in October as part of a push to streamline its AI efforts. The new layoffs, presuming they happen, also come after a year when tech companies laid off workers in increasing numbers amid the rise of AI and a broader focus on profitability. In 2025, it's estimated that nearly 250,000 tech workers were laid off, including some 170,000 in the U.S.

Meta Plans To Cut 10% Of Metaverse Division

Meta's Reality Labs is set for cuts as the firm's metaverse budget continues to decline amid push toward artificial intelligence development. 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 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. Meanwhile, big-name blockchain metaverses such as The Sandbox saw just 776 unique active wallets engage with the platform over the past 30 days, per data from DappRadar. Some have even claimed Meta's Horizon Worlds sees less than 900 daily active users. While Meta may be cooling down on the metaverse, CEO Mark Zuckerberg appears to still be bullish on the growth potential of the metaverse, once calling 2025 a "pivotal year" for the industry.

Meta plans to cut about 10% of employees in one sector

SAN FRANCISCO -- Meta plans to cut about 10% of the employees in its Reality Labs division who work on products including the metaverse, according to three people with knowledge of the discussions, as the company shifts priorities to build next-generation artificial intelligence. The cuts to Reality Labs -- which has roughly 15,000 employees -- could be announced as soon as Tuesday. The layoffs would be a fraction of Meta's total workforce of 78,000, but are set to disproportionately affect those in the metaverse unit who work on virtual reality headsets and a VR-based social network, said the people, who asked not to be identified since they were not authorized to discuss confidential decisions. The cuts could end up affecting more than 10% of the division, one of the people said. Andrew Bosworth, Meta's chief technology officer who oversees Reality Labs, has called a meeting for Wednesday and has urged staff to attend in person, according to a memo sent to employees last week, which was obtained by The New York Times. Bosworth said the meeting was the "most important" of the year but did not elaborate. Meta CEO Mark Zuckerberg asked top executives last year to make cuts in their 2026 budgets while he pours money into AI research. As Meta faces competition from companies such as OpenAI and Google, Zuckerberg has increased the budget for TBD Lab, the skunk works unit at Meta that aims to build superintelligence, a godlike AI system. The company also plans to reallocate some of the money from virtual reality products to increase the budget for its wearables division, which builds smart glasses and wristband computing devices. The layoffs are set to pump the brakes on building virtual reality for the metaverse, Zuckerberg's far-flung vision of what social networking could look like in a VR-based version of the internet. He has chased that vision since 2014, when he bought Oculus, a virtual reality startup that became the foundation for Meta's hardware division. In 2021, Zuckerberg rebranded the company Meta, officially moving away from its Facebook name. But consumers have not flocked to buy Meta's virtual reality headsets, even as the company has spent tens of billions of dollars building them. At the same time, investors have grown wary of Meta's spending as it has ratcheted up its work on artificial intelligence. The company expects to invest tens of billions of dollars on data centers, the computing facilities that power AI development, and it has handed out lavish pay packages to hire top AI researchers. Meta declined to comment. In December, a company spokesperson said Meta was "shifting some of our investment from Metaverse toward AI glasses," and was not planning "any broader changes." Bosworth's memo was earlier reported by Business Insider. Even as the AI race has ramped up, Meta has said it is not giving up on the metaverse. But the Silicon Valley company appears to be redefining exactly what that might look like. The Reality Labs division that works on augmented reality, which builds hardware like glasses and wristbands that allow people to interact with computing menus and commands using voice and gesture commands, is expected to be largely spared from the cuts, two of the people said. That division is responsible for Meta's Ray-Ban sunglasses, which have incorporated a camera and personal AI assistant. The glasses have been a surprise hit, selling more than 2 million units over the past few years, the company has said. The augmented reality division is also responsible for the Ray-Ban Display smart glasses, which have a digital menu inside the lenses that can be navigated with a hardware wristband. At an industry event in Las Vegas last week, Meta said it was delaying the rollout of the Display glasses internationally, citing limited inventory and "unprecedented demand." On a call with investors in July, Zuckerberg said the smart glasses would be "the main way that we integrate superintelligence into our day-to-day lives."

Meta Starts Cutting Jobs, Signaling a Broader Shift in Strategy

According to a Meta spokesperson, the move is part of an effort to shift the company's investment from the metaverse to wearables. Meta is cutting more than 1,000 jobs in its Reality Labs division, a unit working on virtual and augmented reality hardware, software and platforms. The move cements a strategic pivot away from the costly metaverse toward AI-powered wearables and phone-based features. Bloomberg reported on Tuesday that Meta is eliminating roughly 10% of the staff in Reality Labs, which employs about 15,000 people. Internal communications indicate that layoff notifications begin on Tuesday morning and continue throughout the week. "We said last month that we were shifting some of our investment from metaverse toward wearables," a Meta spokesperson told Bloomberg. "This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year." Reality Labs includes teams behind Quest virtual reality headsets. The division has generated more than $70 billion in losses over the past four years, per The New York Times. Meta executives talked about budget cuts as high as 30% for the division in December, according to Bloomberg. Related: Meta Is Planning to Raise Prices on a Popular Product, According to a Leaked Memo The cuts are part of a broader reallocation of capital from metaverse projects towards AI wearables, phone-based AI features and massive data center investments branded internally as Meta Compute. Meta CEO Mark Zuckerberg said on Monday that Meta is planning on building "tens of gigawatts" of AI compute capacity this decade, positioning its infrastructure as a key competitive advantage against rivals like OpenAI, Google and Microsoft. Zuckerberg is also reshaping the company's priorities around devices that can bring AI into everyday life, including smart glasses. That focus arrives as Meta's latest Ray-Ban smart glasses have received a strong reception, reportedly outperforming internal sales expectations. "We're entering a new era where AI glasses and other devices will change how we connect with technology and each other," Zuckerberg wrote in a Threads post last month. "The potential is enormous, but what matters most is making these experiences feel natural." Related: Meta Reportedly Keeps Lists of Ex-Employees It Won't Rehire -- Including Top Performers Strategically, the layoffs signal Meta's belief that AI-enhanced phones and lightweight wearables are a more immediate path to widespread appeal than full metaverse immersion, per Bloomberg. By moving resources toward AI features that can reach billions of existing smartphone users, Meta is chasing scale and advertising opportunities that its virtual reality ecosystem has yet to deliver. Meta intends to reduce its virtual reality investments to create a "more sustainable" business, its chief technology officer, Andrew Bosworth, said in an internal post reviewed by Bloomberg. "With the larger potential user base and the fastest growth rate today, we are shifting teams and resources almost exclusively to mobile to continue to accelerate adoption there," Bosworth wrote. Sign up for the Entrepreneur Daily newsletter to get the news and resources you need to know today to help you run your business better. Get it in your inbox.

Meta began 2026 with a sharp cut of over 1,000 Reality Labs jobs - are Facebook or Instagram affected, or is Apple and Google's AI wearables competition responsible?

Meta began 2026 with a major workforce reset, cutting over 1,000 jobs from its Reality Labs division. The layoffs, affecting nearly 10% of the unit, started on January 13 and mark the first big Bay Area tech cuts of the year. Meta says Facebook, Instagram, and WhatsApp are not impacted. This move addresses $71 billion in losses since 2021. CTO Andrew Bosworth is now shifting capital toward AI-integrated wearables and smart glasses. This restructuring prioritizes immediate AI consumer hardware over long-term metaverse speculation to counter rising competition from Apple, Google, and Samsung's newest 2026 platforms. Meta Platforms started 2026 with one of its biggest strategic resets yet. The company cut more than 1,000 jobs from its Reality Labs division, roughly 10% of the unit's workforce. Employees were informed from January 13. The layoffs mark the first major Bay Area tech cuts this year. Meta confirmed the move does not impact Facebook, Instagram, or WhatsApp. Instead, it reflects rising pressure from heavy losses and growing competition in AI-powered wearables from rivals like Apple and Google. Meta Platforms said the job cuts are limited to Reality Labs, the unit behind virtual and augmented reality products. The division has struggled financially for years. In 2024 alone, it reportedly lost about $17.7 billion. Since 2021, losses have crossed $70 billion. Despite heavy investment, consumer adoption of metaverse platforms like Horizon Worlds has remained slower than expected. ET Budget Survey: Tell us your wishlist Meta's core apps remain unaffected. Facebook, Instagram, and WhatsApp continue to generate the bulk of the company's revenue. Advertising growth and AI-driven content tools inside these platforms are still central to Meta's business. The layoffs signal protection of profitable products while scaling back long-term bets with uncertain returns. The company is not exiting immersive technology. Instead, Meta is shifting focus. Investment is moving away from broad metaverse projects toward AI-driven wearables and advanced artificial intelligence research. Smart glasses are a key priority. Ray-Ban Meta glasses have seen stronger consumer demand than VR headsets, with more than two million units reportedly sold. Competition is intensifying. Apple is refining its AI strategy and exploring lightweight smart glasses to complement Vision Pro. Google is pushing Android XR with partners like Samsung, aiming to build an open ecosystem for AI glasses and headsets. These moves raise pressure on Meta to deliver faster, more practical products. Meta's decision to downsize its metaverse division marks a definitive end to unrestricted spending on virtual environments. The 1,000 job cuts specifically target VR hardware and gaming studios to stop a massive financial drain. Reality Labs lost $17.7 billion in 2024, representing 21% of Meta's total operating costs. By streamlining this workforce, Meta aims to build a more sustainable business model focused on high-demand technology. The company is now reallocating these resources into "Wearables," a department focused on AI-powered eyewear. The Ray-Ban Meta smart glasses have already surpassed two million units in sales, proving that consumers prefer lightweight AI tools over bulky VR headsets. Meta plans to double its production capacity for these glasses by the end of 2026. This shift ensures Meta remains competitive as it prepares for the 2027 launch of its "Orion" true AR glasses. Meta's strategic pivot is less about abandoning virtual reality and more about redefining how immersive technology reaches users. Instead of betting primarily on fully virtual worlds, the company is prioritizing lightweight, AI-driven devices that blend digital intelligence into the physical world. Wearables are central to this vision. AI-powered glasses allow Meta to combine its strengths in artificial intelligence, computer vision, and social platforms into a single consumer product. Voice-based assistants, real-time translation, object recognition, and contextual recommendations all become possible without asking users to put on a headset. This shift also aligns with broader trends in consumer tech. Smartphones are mature. Growth now depends on new form factors. Wearables, especially those enhanced by generative AI, are seen as the next interface. Meta's leadership believes this transition will happen faster than mass adoption of persistent virtual worlds. Reality Labs will continue to develop Quest VR headsets and mixed reality technology, but with tighter budgets and clearer commercial goals. Experimental projects without defined user demand are being deprioritized. The emphasis has moved from building entire digital universes to shipping products people are already willing to buy. Meta's pivot comes as competition in AI wearables intensifies. Rivals are moving quickly, each with distinct strategies that raise the stakes for mainstream adoption. Apple is refining its roadmap after early mixed reactions to Vision Pro. To strengthen its AI capabilities, Apple has partnered with Google to integrate Gemini AI into future versions of Siri and next-generation devices. Industry watchers expect Apple to introduce lighter, display-less smart glasses as early as late 2026. These would complement its broader spatial computing push while directly challenging Meta's Ray-Ban lineup. Google is taking a platform-first approach. Its Android XR initiative, developed with partners like Samsung and XREAL, aims to create an open ecosystem for AI-powered glasses and headsets. Leaked demos and prototype showcases suggest features such as in-lens displays, multimodal AI interaction, and deep cross-device integration. By positioning Android XR as an open alternative to Meta's more closed ecosystem, Google hopes to attract developers at scale. Snap is also doubling down on augmented reality. The company plans to release AI-enhanced Spectacles in 2026, featuring built-in displays and advanced camera-based AR. While bulkier than Meta's Ray-Bans, Snap's glasses focus heavily on social sharing and creator tools. Partnerships around generative AI aim to make Spectacles a distinct platform rather than a niche accessory. None of these companies have publicly linked their strategies to Meta's layoffs. However, the timing underscores a shared belief across Big Tech. The race is no longer just about virtual worlds. It is about who defines the next everyday computing interface. For Meta, the challenge now is execution. Smart glasses and AI assistants are promising, but competition is fierce and margins are unproven at scale. Success will depend on hardware design, battery life, privacy safeguards, and compelling everyday use cases. Meta's advantage lies in its AI research depth and its ability to integrate services across billions of users. (You can now subscribe to our Economic Times WhatsApp channel)

Meta To Cut Over 10% Jobs In Reality Labs Division Amid AI Focus: Report - Alphabet (NASDAQ:GOOG), Alphabet (NASDAQ:GOOGL)

Meta Platforms Inc. (NASDAQ:META) is reportedly planning to cut about 10% or more jobs in its Reality Labs division, which includes the metaverse, to focus more on next-generation AI initiatives. The Reality Labs division, which currently employs around 15,000 people is responsible for virtual reality headsets and a VR-based social network. The layoffs could be announced as early as Tuesday, according to The New York Times. Meta did not immediately respond to Benzinga's request for comment. According to the report, the company plans to shift funding from virtual reality to expand its wearables budget, including smart glasses and wrist-based devices Meta's chief technology officer Andrew Bosworth has called for a meeting on Wednesday, urging staff to attend in person. The purpose of the meeting has been described as the "most important" of the year, although no further details have been provided, the report said. Meta Cuts Jobs, Budgets Across VR And AI The tech giant's layoff decisions come amid increasing competition from OpenAI, Alphabet's Google (NASDAQ:GOOG) (NASDAQ:GOOGL), and Microsoft Corporation (NASDAQ:MSFT). In April, the company laid off an unspecified number of employees from its Reality Labs division, primarily affecting the Oculus Studios unit, which develops VR and AR games and content for Meta's Quest VR headsets. Later, in December, Meta's stock soared after the company announced job cuts and budget reductions of around 30% for its metaverse group. The report suggested that Meta executives are considering up to 30% budget cuts in 2026 for the metaverse division, which includes Horizon Worlds and the Quest VR unit, despite CEO Mark Zuckerberg previously positioning the metaverse as central to the company's future and rebranding Facebook around it. Not just the metaverse division, in October, Meta said it would cut about 600 jobs from its AI division as part of a restructuring aimed at streamlining operations and improving agility, according to an internal memo from Chief AI Officer Alexandr Wang, who joined after Meta's $14.3 billion investment in Scale AI. Meta holds a momentum rating of 21.36% and a quality rating of 95.76%, according to Benzinga's Proprietary Edge Rankings. Click here to see how it compares to other leading tech companies. Price Action: Over the past year, Meta stock climbed 5.53%, as per data from Benzinga Pro. On Monday, it fell 1.70% to close at $641.97. Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. GOOGAlphabet Inc$332.05-0.20%OverviewGOOGLAlphabet Inc$331.28-0.17%METAMeta Platforms Inc$642.470.08%MSFTMicrosoft Corp$475.45-0.36%Market News and Data brought to you by Benzinga APIs

Meta layoffs 2026: CTO Andrew Bosworth confirms job cuts for roughly 10% of employees within the Reality Labs unit

Meta Platforms is beginning to cut more than 1,000 jobs from the company's Reality Labs division, part of a plan to redirect resources from virtual reality and metaverse products toward AI wearables and phone features. The cuts are expected to hit roughly 10% of employees within the Reality Labs group, which has about 15,000 workers. Meta Platforms is beginning to cut more than 1,000 jobs from the company's Reality Labs division, part of a plan to redirect resources from virtual reality and metaverse products toward AI wearables and phone features. Affected employees will be notified of the layoffs starting Tuesday morning, according to an internal post from chief technology officer Andrew Bosworth that was reviewed by Bloomberg News. The cuts are expected to hit roughly 10% of employees within the Reality Labs group, which has about 15,000 workers, Bloomberg reported earlier this week. As part of the reduction, Meta is pivoting its metaverse efforts to focus on mobile devices, according to Bosworth's memo. The company is also planning to cut back on its virtual reality investments to make the business "more sustainable," Bosworth wrote. "We said last month that we were shifting some of our investment from metaverse toward wearables," a company spokesperson said. "This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year." Reality Labs houses Meta's hardware and other futuristic product efforts, including VR headsets, AI glasses and virtual world products. But Reality Labs has lost more than $70 billion since the start of 2021 because many of the investments aren't yet generating meaningful revenue. Underscoring Meta's increasing focus on AI, the tech company and EssilorLuxottica SA are discussing potentially doubling production capacity for AI-powered smart glasses by the end of this year, people familiar with the matter said. Meta has suggested increasing annual capacity to 20 million units or more by the end of 2026, said the people, asking not to be named because the deliberations are private. The metaverse -- a virtual world where people can work, play and exercise -- has been a particularly costly endeavor. Meta spent heavily to develop high-end VR headsets and digital features, like avatars, in preparation for heated competition with other tech firms. That rivalry never materialized, and the metaverse hasn't taken off in the way that Chief Executive Officer Mark Zuckerberg envisioned when he renamed the company Meta from Facebook in 2021. Meta shares were down 1.9% at about 10 a.m. New York time on Tuesday. In December, top executives discussed budget cuts as deep as 30% for the metaverse group, aiming to adjust budgets and funnel more money toward other projects, like AI glasses. Meta has partnered with EssilorLuxottica SA to develop a number of AI-powered spectacles with brands like Ray-Ban and Oakley. Zuckerberg has said those glasses are performing better than expected, and they remain a key part of his plans to increase adoption of Meta's AI assistant. Meta will continue to develop the metaverse, but with a focus on mobile phones instead of the fully immersive VR headsets that the company initially imagined. The team building metaverse software experiences, now called Horizon, will "double down on bringing the best Horizon experiences and AI creator tools to mobile," Bosworth wrote. "With the larger potential user base and the fastest growth rate today, we are shifting teams and resources almost exclusively to mobile to continue to accelerate adoption there." Meta will also keep investing in VR headsets and features, but less aggressively. "Starting today, VR will operate as a leaner, flatter organization with a more focused road map to maximize long-term sustainability," Bosworth wrote.

Meta Cutting Reality Labs Workforce by 10% | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. That's according to a report Monday (Jan. 12) by Bloomberg News, which characterizes the move as part of a larger plan by Meta to reduce its focus on virtual reality products as it concentrates on other artificial intelligence (AI) wearables. The layoffs in the roughly 15,000-person division are expected this week, the report said, citing a source familiar with the company's plans who wasn't permitted to speak publicly. The news follows earlier reports that Meta CEO Mark Zuckerberg had executives to find ways to reduce Reality Lab's budget, including by cutting some virtual reality and metaverse products. The division has been losing billions each quarter for the last several years. The metaverse effort has also been questioned by investors who view it as a waste of resources and criticized by watchdogs who argue that its virtual worlds present a threat to children's privacy and safety. Executives had discussed budget cuts of up to 30% for Reality Lab's metaverse group, Bloomberg added. PYMNTS has contacted Meta for comment but has not yet gotten a reply. "Just a few years ago, the metaverse looked like the next platform shift, promising immersive digital worlds where people would live, work and transact at scale," PYMNTS wrote last month. "Today, Meta's virtual universe is not dead, but it certainly has shrunk and left is a sobering record of investment, stalled consumer adoption and a set of hard lessons about how innovation in payments and commerce really happens." In a column in 2023, PYMNTS CEO Karen Webster argued that the term "metaverse" had been co-opted by Meta's rebranding and a wave of hype that shifted funds and attention from technologies aimed at addressing problems in the physical world. "Now, the company is tilting its capital plan toward data centers, cloud contracts and AI talent, and integrating artificial intelligence features across its existing apps, where users already spend time and money," PYMNTS added. News of the layoffs come a week after Meta said it was delaying a global launch of its smartglasses amid steep demand among U.S. consumers. "Meta Ray-Ban Display is a first-of-its-kind product with extremely limited inventory," the company wrote on its blog. "Since launching last fall, we've seen an overwhelming amount of interest, and as a result, product waitlists now extend well into 2026." Due to this "unprecedented demand and limited inventory," the Facebook parent said it would halt the international expansion of the glasses to the U.K., France, Italy and Canada, which had initially been slated for the early part of this year.

Meta to cut about 1,500 jobs in Reality Labs as Mark Zuckerberg...

Meta is preparing to cut about 1,500 employees from its Reality Labs division -- roughly 10% of the unit's 15,000-person workforce -- as early as this week as the company pivots hard toward artificial intelligence. The cuts are expected to hit teams working on virtual-reality headsets and Meta's VR-based social network, even as executives pour billions into AI research, data centers and smart-glasses development, according to the New York Times. Bosworth has called an all-hands meeting for Wednesday and urged employees to attend in person, describing it internally as the "most important" meeting of the year, people familiar with the message told Business Insider. Reality Labs, which employs roughly 15,000 people, has been a persistent drag on Meta's finances, racking up more than $70 billion in losses since 2020 as consumer demand for virtual-reality headsets has lagged. The looming layoffs come as CEO Mark Zuckerberg has ordered top executives to rein in 2026 budgets while he pours tens of billions of dollars into artificial intelligence, including expanded funding for Meta's skunkworks TBD Lab, which is tasked with building what he has described as "superintelligence." To staff the effort, Meta has been handing out lavish compensation packages to lure top AI researchers and engineers, while also striking costly deals to accelerate its ambitions. Meta has also overhauled its employee review and bonus system, unveiling a new performance program called Checkpoint that sharply increases payouts for top performers, according to internal documents obtained by Business Insider. Under the new system, a small group of standout employees will be eligible for bonuses worth up to 300% of their base payout, a dramatic escalation designed to reward what the company calls "truly exceptional impact." The Checkpoint program collapses Meta's sprawling review process into four performance tiers, with roughly 20% of employees labeled "Outstanding" and eligible for double their base bonus, while about 70% are expected to land in an "Excellent" category with a 115% multiplier. Workers deemed to "Not Meet Expectations" will receive no bonus at all, reinforcing a sharper performance curve as Meta tightens standards across the company. The changes, which take effect in mid-2026, follow Zuckerberg's push to harden Meta's performance culture after a year of layoffs and internal pressure to do more with fewer people. The company has said the new system is meant to reduce bureaucracy and free up time, but the timing has fueled anxiety among employees as Meta simultaneously cuts jobs and signals that pay, promotions and survival will increasingly hinge on measurable impact.

Meta plans to cut 10% of Reality Labs staff amid AI shift - NYT By Investing.com

Investing.com -- Meta is planning to cut around 10% of employees in its Reality Labs division as the company shifts priorities toward building next-generation artificial intelligence. The layoffs, which could be announced as early as Tuesday, will primarily affect staff working on virtual reality headsets and a VR-based social network within the metaverse unit, according to a report from the New York Times, citing sources familiar with the discussions. Reality Labs has approximately 15,000 employees, making the cuts a small fraction of Meta's total workforce of 78,000. However, the reduction could ultimately exceed 10% of the division, one source indicated. Andrew Bosworth, Meta's chief technology officer who oversees Reality Labs, has scheduled what he called the "most important" meeting of the year for Wednesday, requesting staff attend in person, according to an internal memo. This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Meta Shuts 3 VR Studios and Lays Off Hundreds of Devs as It Pivots From Virtual Reality and the Metaverse to AI - IGN

Cuts expected to hit around 10% of Reality Labs' 15,000-strong workforce. Meta is laying off around 10% of staff at its Reality Labs division as part of sweeping cuts set to affect more than 1,000 people. This includes the closure of a number of VR-first studios, such as Twisted Pixel, the studio behind Deadpool VR, Resident Evil 4 VR developer Armature Studio, and Asgard's Wrath maker, Sanzaru Games. According to Bloomberg, the cuts come as Meta pivots away from the Metaverse towards AI, phones, and wearable tech. The cuts come just over four years after Facebook changed its name to Meta and went big on virtual reality and the Metaverse. Letters reportedly went out yesterday (Tuesday, January 13) morning, and developers from the impacted studios shared their shock on social media throughout the day. "I've just been laid off. It appears the entire Twisted Pixel games studio has been shut down. Sanzaru Games, too," one now former member of staff said, while a designer wrote: "unfortunately, I was part of the layoffs today at Meta, and will be seeking a new role. To my Twisted Pixel Games family: it was an honor to work alongside you for 3.5 years and ship Marvel's Deadpool VR. We made something really special together and no one can ever take that away." Twisted Pixel is the studio behind a number of popular Xbox Live Arcade games, such as 2009's The Maw and 'Splosion Man. It became a part of Microsoft Studios in 2011, and went on to release Xbox 360 Kinect-exclusive shooter The Gunstringer, and Xbox One game LocoCycle, before becoming an independent company again in 2015 and moving into VR game development. Meta only acquired Armature and Twisted Pixel in late 2022, and Sanzaru in 2020. However, it is now seemingly shedding much of its internal VR business as Meta scrambles to recover billion-dollar losses and pivot to AI. In a statement, Meta confirmed the three studio closures: "we said last month that we were shifting some of our investment from Metaverse toward Wearables. This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year." According to Reuters, CEO Mark Zuckerberg prioritized and spent heavily on the Metaverse, only for the business to burn more than $60 billion since 2020. The Reality Labs business also produces Meta's Quest mixed-reality headsets. According to CNBC, Meta isn't abandoning VR entirely. It is now courting developers who build games for Roblox to build experiences for Horizon Worlds.