Layoffs loom as Meta plans 30% budget cuts for metaverse
What's the story
Meta Platforms, the tech giant led by Mark Zuckerberg, is planning to slash its budget for metaverse projects by a whopping 30%, according to Bloomberg. The move will impact the company's metaverse group, which includes Meta Horizon Worlds and the Quest virtual reality (VR) unit. The decision comes as part of Meta's annual budget planning for 2026, which included meetings at Zuckerberg's estate in Hawaii last month.
Job cuts
Potential layoffs and impact on VR division
The proposed budget cuts could lead to layoffs as early as January 2026, as per the report. The majority of the cuts are likely to target Meta's VR division, which accounts for most of its metaverse-related spending. Further reductions are also expected for Horizon Worlds, a key part of the company's metaverse group.
Financial impact
Reality Labs and metaverse project losses
The metaverse projects fall under Reality Labs, the division responsible for long-term hardware investments such as VR headsets and AR glasses. Since early 2021, Reality Labs has racked up more than $70 billion in losses. Investors have long criticized the metaverse initiative as a costly distraction, while regulators have raised concerns over child safety and data protection in Meta's virtual environments.
Strategic shift
Previous layoffs and future focus
In July, Meta laid off employees in its Reality Labs division, particularly those working with Oculus Studios and hardware development. The move came after a larger round of job cuts in February when the company cut nearly 3,600 jobs, about 5% of its global workforce, over performance-related issues. The downsizing is part of CEO Mark Zuckerberg's strategy to create a leaner organization.