Meta is reportedly set to lay off around 10% of staff from its metaverse arm this week, as the tech giant focuses its resources on artificial intelligence.
Meta could announce the cuts as soon as Tuesday, the New York Times reported on Monday, citing sources.
Meta’s Reality Labs has around 15,000 staff members. The division focuses on virtual reality (VR) gear such as headsets, as well as operating the firm’s metaverse platforms Horizon Worlds and Horizon Workrooms.
Around 10% of the division’s employees are expected to be cut, around 1,500 people.
Cointelegraph has reached out to Meta for comment.
Meta cutting metaverse budget
Meta has been making gradual cuts to its metaverse budget over the past year as the firm ramped up its focus on artificial intelligence (AI).
In early December, Meta’s shares spiked after reports emerged that the firm was potentially slashing 30% from its metaverse budget and reallocating the funds to AI.
The NYT report also states that Meta plans to reallocate some of its money from Reality Labs to increase the budget of its wearables division, which focuses on smart glasses and wrist-worn devices such as the Meta Neural Band.
Boxing in Meta’s metaverse. Source: Meta
The firm, formerly known as Facebook, changed its name to Meta in October 2021 as part of a major pivot from social media to the metaverse, VR and augmented reality.
Meta has lost over $70 billion on Reality Labs since the unit was launched in August 2020, with the arm posting $4.4 billion worth of operational losses in Meta’s last financial earnings report from Q3 2025.
At the time, the metaverse was one of the most trending sectors in crypto and traditional tech, but user adoption has failed to reach mainstream levels.
Currently, gaming-oriented metaverse platforms such as Roblox and Fortnite dominate the market, with hundreds of millions of active daily users. However, these platforms are outliers, with the rest of the sector having minuscule usage metrics in comparison.
Meanwhile, big-name blockchain metaverses such as The Sandbox saw just 776 unique active wallets engage with the platform over the past 30 days, per data from DappRadar. Some have even claimed Meta’s Horizon Worlds sees fewer than 900 daily active users.
While Meta may be cooling down on the metaverse, CEO Mark Zuckerberg appears to still be bullish on the growth potential of the metaverse, once calling 2025 a “pivotal year” for the industry.
