Meta to Cut Around 10% of Metaverse Unit as AI Takes Priority
Meta is getting ready to minimize roughly 10% of employees from its metaverse-focused division, a transfer that underscores the corporate’s accelerating shift towards synthetic intelligence.
Key Takeaways:
- Meta plans to minimize about 10% of Reality Labs employees as it shifts funding from the metaverse towards AI.
- The transfer follows years of heavy losses at Reality Labs and weaker-than-expected consumer adoption.
- Gaming-focused worlds dominate engagement, whereas blockchain and company metaverses proceed to battle for customers.
The layoffs could possibly be introduced as quickly as Tuesday, in accordance to a report from the New York Times, which cited individuals acquainted with the matter.
The cuts are anticipated to hit Reality Labs, the unit accountable for Meta’s digital and augmented actuality ambitions.
Meta’s Reality Labs Faces 1,500 Job Cuts in Metaverse Pullback
Reality Labs employs about 15,000 individuals and oversees {hardware} such as VR headsets alongside digital platforms together with Horizon Worlds and Horizon Workrooms.
A discount of round 10% would have an effect on roughly 1,500 workers. Meta declined to touch upon the report.
The transfer follows a sequence of price range changes that sign a cooling dedication to the metaverse as Meta doubles down on AI.
In early December, the corporate’s shares rose after stories recommended Meta was contemplating slashing as a lot as 30% from its metaverse spending and redirecting these assets towards AI improvement.
The newest report additionally mentioned Meta plans to shift some funding from Reality Labs to its wearables enterprise, which incorporates good glasses and wrist-worn gadgets such as the Meta Neural Band.
Meta, previously Facebook, rebranded in October 2021 in a high-profile guess on digital worlds, VR and augmented actuality.
That pivot got here as metaverse initiatives gained traction throughout tech and crypto, however consumer adoption has struggled to meet early expectations.
Since Reality Labs launched in August 2020, the unit has accrued greater than $70 billion in losses.
In Meta’s most up-to-date earnings report for the third quarter of 2025, Reality Labs posted working losses of $4.4 billion.
The broader metaverse market has additionally proven uneven engagement. Gaming-focused platforms such as Roblox and Fortnite stay dominant, every drawing tons of of hundreds of thousands of customers.
Outside these ecosystems, exercise ranges are far decrease. Blockchain-based digital worlds have seen notably restricted traction, with The Sandbox recording simply 776 distinctive lively wallets over the previous 30 days, in accordance to information from DappRadar.
Some stories have additionally recommended that Meta’s Horizon Worlds attracts fewer than 900 day by day lively customers.
In June final 12 months, Meta traders overwhelmingly shot down a proposal urging the corporate to discover including Bitcoin to its stability sheet, in accordance to a May 28 submitting.
The measure acquired simply 3.92 million votes in favor, roughly 0.08% of all shares, whereas practically 5 billion voted towards it.
With CEO Mark Zuckerberg controlling 61% of voting energy, the result was successfully predetermined.
The proposal got here from Bitcoin advocate Ethan Peck, who argued Meta ought to allocate half of its $72 billion money pile into BTC as a hedge towards inflation and diminishing actual returns on money and bonds.
Peck cited BlackRock’s steerage supporting a small Bitcoin allocation and submitted the proposal on behalf of his household’s Meta holdings.
He serves as Bitcoin director at Strive and has pushed related campaigns at different tech giants.
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