Meta is planning to lay off approximately 10 per cent of employees in its Reality Labs division, according to a report by Bloomberg. The move is expected to be announced this week and reflects a broader realignment of the company’s priorities.
Reality Labs, which oversees Meta’s virtual reality and metaverse efforts, has grown into a large organisation over the years, supported by multi-billion-dollar investments and a sizeable global workforce.
Reality Labs Struggles With Mass Adoption
The division has played a key role in Meta’s ambition to build immersive digital environments, developing VR hardware, virtual social platforms, and metaverse experiences.
However, despite technological improvements, Reality Labs has faced difficulty achieving widespread consumer adoption. High development costs and slower-than-expected uptake have continued to challenge the unit’s ability to scale into a mainstream business.
Budget Reviews Drive Shift Away From Metaverse Projects
The impending layoffs follow internal budget reviews that began late last year. Meta CEO Mark Zuckerberg reportedly asked Reality Labs leaders to identify areas where spending could be reduced, including pausing or slowing select VR and metaverse initiatives.
While Meta still frames the metaverse as part of its long-term vision, artificial intelligence has now moved to the forefront of its near-term strategy.
Artificial Intelligence Takes Centre Stage
Meta is significantly increasing investment in:
- Advanced AI research and development
- Large-scale data centres
- High-performance computing infrastructure
- Teams focused on next-generation AI models and products
This strategic pivot aligns with changing user demand, as AI-powered tools and smart technologies gain traction far more quickly than virtual reality products, which remain niche for most consumers.
Industry-Wide Shift Across Big Tech
Meta’s decision reflects a broader restructuring trend across the technology sector. Companies are increasingly scaling back experimental or slow-growth divisions while doubling down on AI, automation, and cloud computing.
In 2025, both Microsoft and Amazon implemented large-scale layoffs as they reorganised around AI-first strategies. Meta itself has also reduced staff across other teams in recent years amid cost pressures and evolving market dynamics.
Reality Labs Under Closer Scrutiny
Although Meta has not indicated plans to wind down Reality Labs entirely, the workforce reduction signals a more cautious and selective approach to funding long-term projects. Virtual reality and metaverse teams now face tighter oversight, while AI-driven products are emerging as the company’s primary growth engine.
The latest round of cuts highlights how rapidly priorities are shifting in Big Tech, with artificial intelligence now defining competitiveness, capital allocation, and future growth strategies.
