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New Delhi: Meta is preparing to cut about 10% of its workforce in the Reality Labs division, the unit behind Meta Quest headsets, Ray-Ban smart glasses and its virtual reality metaverse platform, according to a Bloomberg report. The move comes as the company shifts more resources toward building next-generation artificial intelligence systems, which have become a top priority for CEO Mark Zuckerberg.
The Reality Labs unit, which has been central to Meta’s long-term bet on virtual reality, employs around 15,000 people. The planned cuts could be announced as soon as January 13, people familiar with the matter told Bloomberg. The layoffs are expected to hit teams working on virtual reality hardware and the VR-based social network most heavily, raising fresh questions about the future of Meta’s metaverse ambitions.
Meta started entering the metaverse over 10 years ago with the acquisition of Oculus, which cost the company $2 billion. It gained pace in 2021 as Facebook changed its name to Meta to indicate a wider emphasis on virtual and augmented reality around the company. Since then, the firm has invested tens of billions of dollars in VR and AR products, yet the adoption has not been as fast as expected.
Simultaneously, the competition in the field of AI has become more intense. Zuckerberg has been spending more on high-level AI research, including a top-secret laboratory, TBD Lab, which focuses on the development of superintelligent systems. He also requested senior executives to reduce their 2026 budgets to allocate more funds to AI development last year.
An internal memo sent last week shows that Reality Labs chief and Meta CTO Andrew Bosworth has called an “all-hands” meeting for January 14, asking employees to attend in person. Sources say the meeting is likely linked to the upcoming job cuts, which will mainly affect workers involved in VR headsets and metaverse software.
Meta is also planning to shift some funding away from virtual reality products toward its wearables business. This division builds smart glasses and wrist-based computing devices, which the company sees as a more practical path to combining AI with consumer hardware.
Despite years of heavy investment, Meta’s VR business has not delivered the growth investors once hoped for. Sales of headsets and engagement in virtual worlds have remained limited, increasing pressure on the company to rethink its strategy.
In December, a Meta spokesperson said the company was “shifting some of our investment from the metaverse toward AI glasses” and insisted there were no plans for broader changes at the time. The reported Reality Labs layoffs now suggest that the shift toward artificial intelligence is becoming deeper and more urgent.
