Meta Platforms is preparing to cut about 10 percent of its workforce within Reality Labs this week, according to a report by The New York Times. Reality Labs oversees Meta’s virtual reality hardware and metaverse-related products and employs around 15,000 people, which means roughly 1,500 roles could be affected. The company has not confirmed the final number of positions being eliminated.
The cuts come as Meta reassesses its large investment in the metaverse, a strategy that has struggled to achieve widespread user adoption despite being positioned as a long-term growth engine when the company rebranded from Facebook in 2021. Reality Labs has been a significant financial burden. Meta has spent tens of billions of dollars on the division over the past several years, and quarterly losses have continued to mount. Investors have increasingly questioned whether the scale of spending is justified given the slow pace of commercial progress.
Analysts following the sector say interest in metaverse projects has slowed across the board. Both large technology companies and Web3 platforms have seen fewer active users than they anticipated, which has made it harder for Meta to push its own virtual world plans into the mainstream.
The report also indicates that Meta’s top leadership is giving priority to artificial intelligence as they decide where to place their resources. The company sees more room for growth in AI than in the metaverse, and its recent work on AI models and consumer wearables, such as smart glasses, appears to be drawing stronger public interest than its virtual reality efforts.
Your completely free resource hub designed to boost your knowledge of cryptocurrencies
Meta Chief Technology Officer Andrew Bosworth, who heads Reality Labs, is expected to address employees in an internal meeting this week. Staff have reportedly been encouraged to attend in person, which underlines the importance of the discussion. Meta did not offer any public statement on the layoffs when asked.
People familiar with the situation say the current round of cuts shows that the company is rethinking how much attention it can place on the metaverse right now. Meta still talks about developing that vision, but its focus is shifting as the market cools and investors push for clearer returns. Moving more resources toward artificial intelligence fits with what is happening across the tech industry, where companies are putting their money into areas that show faster adoption and a more immediate path to revenue.
