Meta is preparing to cut around 10% of employees in its Reality Labs division, a move that signals a sharper pivot away from the metaverse and toward building next-generation artificial intelligence. The job reductions are expected to be announced this week and would primarily hit teams focused on virtual reality headsets and a VR-based social network, according to people familiar with the internal discussions.
Reality Labs has roughly 15,000 employees, meaning the cuts could impact a substantial number of people even if they represent a small fraction of Meta’s overall workforce. Sources familiar with the planning say the percentage could ultimately rise above 10%, depending on final budget decisions and how the company reshuffles priorities across product lines.
A major moment for Reality Labs
The layoffs come at a critical point for Meta’s long-running bet on immersive computing. Mark Zuckerberg has pursued the metaverse vision for more than a decade, starting with Meta’s acquisition of Oculus in 2014 and accelerating in 2021 when the company rebranded from Facebook to Meta. Reality Labs became the centerpiece of that strategy — the hardware and platform engine meant to turn virtual worlds into the next evolution of social networking.
But consumer adoption hasn’t matched the scale of investment. Meta has spent tens of billions of dollars on Reality Labs over the years, and while VR headsets built a loyal niche audience, mass-market momentum has been harder to achieve. At the same time, Wall Street’s patience with metaverse spending has been tested, especially as the industry’s focus has shifted to A.I. capabilities that can be monetized more directly across ads, productivity, and consumer devices.
Internally, the cuts are expected to be framed as part of a broader resource reallocation — essentially “pumping the brakes” on certain metaverse efforts while Meta accelerates investments in A.I. research, computing infrastructure, and new product categories that blend A.I. with wearables.
Why A.I. is now the priority
Meta’s A.I. push has grown more aggressive as competition intensifies from companies such as OpenAI and Google. Building and running leading A.I. models requires enormous amounts of computing power, which is why Meta has been ramping up spending on data centers — the large-scale facilities that power training and deployment of modern models.
Meta has also been paying heavily to recruit top A.I. talent, and the company has signaled that the next phase of its strategy depends on scaling computing capacity fast. That shift is one reason executives have been asked to tighten budgets for 2026, freeing resources for A.I. infrastructure and frontier research.
For context on how big tech companies are reshaping budgets around A.I. infrastructure and talent, see coverage from The New York Times (Technology) and Reuters (Technology).
Wearables and smart glasses likely protected
Not every part of Reality Labs is expected to be hit equally. People familiar with the discussions say Meta’s augmented reality and wearables efforts are likely to be largely spared, reflecting a belief inside the company that smart glasses and wrist-worn input devices could become a more practical path to mainstream adoption than full VR immersion.
Meta has increasingly positioned smart glasses as a key “bridge” product — devices that are lightweight enough for daily use, but capable of delivering A.I. assistance, camera features, and contextual computing. The company’s Ray-Ban smart glasses have been described as a surprise commercial success relative to earlier expectations, and Meta has teased more advanced versions that include in-lens displays controlled by gestures and a wristband.
That makes the internal strategy clearer: rather than betting on a single, fully virtual internet, Meta appears to be betting on a world where A.I. is everywhere — and where the primary interface might be glasses and wearables, not a headset that takes people out of daily life.
What the layoffs could mean next
If Reality Labs cuts proceed at the scale described, the near-term impact could include slower iteration on VR hardware, fewer experiments inside metaverse social products, and a consolidation of teams around projects with the highest probability of shipping and generating revenue. That doesn’t necessarily mean Meta is abandoning the metaverse — but it does suggest the company is redefining what “metaverse” means in practice.
In recent years, Meta has hinted that the long-term endpoint may be a blend of A.I. assistants, mixed reality, and always-on computing — a world where immersive experiences still exist, but are not the only (or even primary) destination. In that future, Reality Labs becomes less about building a single virtual universe and more about building the devices and platforms that let people move between the physical and digital seamlessly.
For employees, this week is likely to feel like a turning point. Reality Labs was once the symbol of Meta’s boldest ambition. Now, as Zuckerberg “doubles down” on A.I., the company is signaling that the next era will be won not by who builds the biggest virtual world — but by who builds the most capable intelligence layer and the infrastructure to run it at global scale.
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