Meta is curtailing its metaverse push and cutting more than 1,000 jobs—about 10% of its Reality Labs hardware and Horizon Worlds teams—while closing several first-party VR studios, according to people familiar with the matter. The retrenchment marks a sharp turn from the company’s 2021 rebrand and follows years of heavy losses at Reality Labs, which has racked up over $70 billion in cumulative red ink and most recently posted a $4.4 billion quarterly loss on $470 million in sales.
Chief Executive Mark Zuckerberg is redirecting resources to artificial intelligence and wearables. Meta has elevated AI product leadership, boosted 2025 capex guidance to as much as $72 billion with larger increases expected in 2026, and aggressively recruited AI talent, including the hire of Scale AI’s founder to help steer strategy. The company is also leaning into its Ray-Ban Meta smart glasses, citing strong U.S. demand and expanded capacity with partner EssilorLuxottica.
While not abandoning VR, Meta aims to make Horizon Worlds more akin to Roblox and Minecraft and push it onto smartphones to attract younger users, aided by a $50 million creator fund. CTO Andrew Bosworth is set to address staff amid the reorganization. The reset comes as Meta works to keep pace with OpenAI and Google, prepares a new “Avocado” AI model, and grapples with a stock that has lagged peers.
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