Meta prepares to slash metaverse budget by 30% after $70 billion in losses, pivots to AI
11 Sources
[1]
Meta could axe up to one-third of its 'metaverse' budget next year
Meta may slash its budget for metaverse projects by up to 30 percent next year, according to a report from Bloomberg. Sources tell the outlet the potential cuts haven't been finalized, but they would impact the unit that works on Meta's Quest virtual reality headsets, along with its social platform
[2]
Zuckerberg's metaverse dream is collapsing after billions in losses
Serving tech enthusiasts for over 25 years. TechSpot means tech analysis and advice you can trust. Bottom line: After burning tens of billions and stubbornly insisting the metaverse would eventually justify the cost, Mark Zuckerberg appears to be backing away from his most ambitious project. Once
[3]
Meta pivots to AI smart glasses as metaverse bet struggles
The strategic shift to the Metaverse was the reason why Facebook changed its name to Meta in 2011. "We aren't planning any broader changes than that," said Meta's spokesperson, without commenting on whether the shift in investments will result in layoffs. Now, the company is seeking to build on
[4]
Meta Weighs Cuts to Its Metaverse Unit
Meta is considering making cuts to a division in its Reality Labs unit that works on the so-called metaverse, said three employees with knowledge of the matter. The cuts could come as soon as next month and amount to 10 to 30 percent of employees in the Metaverse unit, which works on
[5]
Mark Zuckerberg is Making Big Cuts to the Metaverse After $77 Billion Loss
After renaming his company to reflect its shift toward the metaverse in 2021 when he declared it as the next frontier, Mark Zuckerberg is now set to make big cuts to Meta's Reality Labs. The Wall Street Journal estimates that Zuckerberg's foray into the immersive online world has lost Meta an
[6]
Meta eyes big cuts to its metaverse budget in the AI era
Mark Zuckerberg built a $70 billion ghost town. Now, Meta is quietly killing the lights in parts of the metaverse, trimming Reality Labs spending, and talking up AI and the core apps that actually make money -- instead of legless meetings in virtual conference rooms. According to Bloomberg News,
[7]
Meta's Zuckerberg plans deep cuts for Metaverse efforts | Fortune
Meta Platforms Inc.'s Mark Zuckerberg is expected to meaningfully cut resources for building the so-called metaverse, an effort that he once framed as the future of the company and the reason for changing its name from Facebook Inc. Executives are considering potential budget cuts as high as 30%
[8]
Meta to cut metaverse budget and team - to no-one's great surprise
For many years now Mark Zuckerberg seems to have been the only one with any great belief in the future of his so called 'metaverse', but reality may now be hitting home. The name change from Facebook to Meta was driven by Mark Zuckerberg's belief that we would all hang out in virtual reality
[9]
Metaverse in big trouble? Meta, Facebook's parent company, plans big cuts as Zuckerberg's vision faces potential failure; here's what you need to know
Meta, Facebook's parent company, is reportedly planning significant resource cuts for its metaverse division, potentially by 30% in 2026, including layoffs. This strategic shift aims to redirect investments towards AI glasses and other wearables within Reality Labs, reflecting a re-evaluation of
[10]
Meta's Zuckerberg plans deep cuts for metaverse efforts
Meta Chief Executive Mark Zuckerberg is expected to meaningfully cut resources for building the so-called metaverse, an effort that he once framed as the future of the company and the reason for changing its name from Facebook. Executives are considering potential budget cuts as high as 30% for
[11]
Meta Considers 30% Budget Cuts for Metaverse Group Amid Shift to AI | 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. The proposed cuts are part of Meta's annual budget planning for 2026, and they
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Meta is planning to cut its metaverse budget by up to 30 percent as early as January 2026, affecting Reality Labs units working on Quest VR headsets and Horizon Worlds. After accumulating over $70 billion in losses since 2020, Mark Zuckerberg is redirecting investments toward AI-powered smart glasses and wearables, where Meta Ray-Bans have exceeded internal sales targets.
Meta Plans Major Metaverse Budget Cuts After Years of Heavy Losses
Meta is preparing to slash its metaverse budget by up to 30 percent as early as January 2026, marking a dramatic retreat from Mark Zuckerberg's metaverse dream that once defined the company's identity
1
2
. The metaverse budget cuts will primarily impact Reality Labs, the division responsible for Quest VR headsets and Horizon Worlds, Meta's virtual platform where users interact as avatars3
. Since Meta started reporting Reality Labs revenue in Q4 2020, the division has accumulated approximately $70-75 billion in operating losses, with some estimates reaching $77 billion2
5
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Source: Quartz
Strategic Shift to AI-Powered Smart Glasses Gains Momentum
Meta confirmed it is redirecting investments from metaverse projects toward AI-powered smart glasses and wearables, capitalizing on unexpected success in this segment
1
. A Meta spokesperson stated the company is "shifting some of our investment" from the metaverse group toward AI glasses and wearables given the "momentum" in the segment2
. The Ray-Ban Meta smart glasses, introduced in partnership with Ray-Ban in 2021 and updated in September with augmented reality glasses featuring built-in displays, have surpassed internal sales targets in recent years4
3
. The latest models feature a small display within the lens that can describe what it sees and translate text, representing a breakthrough that enhances functionality while maintaining compact design3
. Meta recently unveiled the second-generation Ray-Ban Meta, the Oakley Meta Vanguard, and the Meta Ray-Ban Display in September2
.
Source: Fortune
Investor Skepticism Lifts as Meta Refocuses on Artificial Intelligence
Meta's stock jumped 3.4 percent following news of the budget cuts, reflecting investor skepticism about the metaverse that has persisted for years
2
5
. Mark Zuckerberg rebranded Facebook to Meta in 2021, aligning the company with his vision for immersive Virtual Reality (VR) worlds, but the generative AI revolution shifted industry priorities2
4
. For 2025, Meta raised its capital expenditure forecast to approximately $70-72 billion, heavily linked to AI infrastructure including data centers, compute hardware, and cloud investments2
. The company now focuses on building AI superintelligence with high-profile hires, most recently adding former Apple UI designer Alan Dye to oversee design of "hardware, software and AI integration for its interfaces"1
4
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Source: Japan Times
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Competitive Landscape Shifts as VR Adoption Stalls
Meta executives believe they can decelerate Virtual Reality (VR) efforts as competitive pressure has lessened, with Apple and Google slowing their VR device development that was furious in 2021
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. Despite significant technical advances in virtual reality devices, consumers have not widely embraced the technology, with users of the Meta Quest and Apple Vision Pro reporting that headsets feel heavy and uncomfortable after prolonged use4
5
. Augmented Reality (AR) and wearables now represent the growth area, with many players including firms in China joining the race to build smart glasses and wearable technology3
. Meta has developed Llama and Meta AI as part of its artificial intelligence strategy, alongside next-generation AI-powered versions of Meta Ray-Bans with built-in augmented reality displays5
. One analyst from Forrester called Reality Labs a "leaky bucket" and predicted earlier this year it would close metaverse projects, though Meta maintains it won't abandon building the metaverse entirely5
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