Meta may cut metaverse budget 30%, layoffs may follow: Bloomberg
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The news: Meta is weighing cuts of up to 30% to its metaverse group, including possible layoffs from January, after years of losses and growing investor and regulatory pressure, Bloomberg reported citing people familiar with the discussions.
Mark Zuckerberg had once described its metaverse efforts as the company’s future. Executives are considering budget reductions of up to 30% for the group behind Meta Horizon Worlds and the Quest virtual reality unit, with potential layoffs as early as January, according to the report. The final magnitude of the cuts has not been decided.
The numbers: According to the news agency, the cuts are part of 2026 budget planning following meetings last month at Zuckerberg’s compound in Hawaii. While Meta has asked for 10% cuts across all departments in recent years, the metaverse unit was told to reduce spending more deeply due to limited competition in the space and ongoing scrutiny from investors and regulators.
Meta shares rose as much as 5.7% after the report.
The context: The metaverse group sits within Reality Labs, a division focused on long-term bets like VR headsets and AR glasses, which has posted losses exceeding USD70 billion since early 2021.
That year, amid growing criticism over privacy and safety issues on Facebook, Zuckerberg rebranded the company around the vision of the metaverse and began spending heavily on it. The strategy, however, has failed to generate the expected traction, and Meta has not seen the level of industry-wide competition it had anticipated.
Investor and watchdog scrutiny has also intensified, particularly around children's safety in virtual worlds.
Bloomberg noted Zuckerberg has largely stopped referencing the metaverse in public or on earnings calls, instead turning attention to generative AI products and hardware like Meta’s Ray-Ban smart glasses.
Meta declined to comment.
The source: Bloomberg
