Meta $META ( ▼ 1.7% ) is reportedly pulling back even further from its metaverse era.
According to The New York Times, Meta plans to cut roughly 10% of employees in Reality Labs, the division responsible for the company’s virtual and augmented reality hardware, including headsets and smart glasses. The report says metaverse-focused teams are the main target of the reductions.
Reality Labs Has Been a $70 Billion Hole
Reality Labs has been one of the most expensive experiments in modern tech history.
The division has generated limited meaningful revenue while racking up roughly $70 billion in losses since Meta began reporting the segment’s financials in 2020.
Aside from the Meta Ray-Ban glasses, most Reality Labs products have struggled to find broad consumer traction.
The Metaverse Vision Never Took Off
This is the unit built around the vision Mark Zuckerberg spent years evangelizing: the metaverse as the next computing platform.
But the mass adoption never materialized, and the consumer appetite for VR as a daily-use product still hasn’t shown up in a way that can justify the scale of Meta’s spending.
So while the tech may still have long-term potential, Wall Street’s patience clearly does not.
Now the Money Is Going to AI
The layoffs fit the broader strategic pivot underway at Meta.
Rather than continuing to burn billions chasing a metaverse future, Meta has shifted its focus toward building AI “superintelligence,” a move that reflects where the industry’s competitive battle is happening right now and where investor excitement is concentrated.
Bottom line: Reality Labs is getting smaller because Meta is reallocating capital toward AI. The metaverse may still exist inside Meta, but it is no longer the company’s main bet.