Meta $META ( ▲ 0.32% ) is reportedly preparing to slash spending on its metaverse and virtual reality projects by as much as 30 percent, marking a major pullback from the strategy that inspired its 2021 name change. Bloomberg reports that the cuts will hit Reality Labs, the division behind Quest headsets, Horizon Worlds, and the company’s Ray-Ban smart glasses.
Reality Labs has become one of the most expensive bets in Silicon Valley. The unit has lost roughly $70 billion since Meta began breaking out its results in 2020, and consumer adoption of Zuckerberg’s metaverse vision has consistently lagged expectations. Horizon Worlds in particular has struggled to gain traction.
Investors cheered the rumored shift. Meta shares jumped as much as 5 percent in early trading as the market interpreted the move as a sign that Meta is redirecting its attention to faster growing, higher ROI opportunities. The company has been on an aggressive hiring spree for AI talent, especially within its new Meta Superintelligence Labs, signaling that AI is increasingly becoming the center of Meta’s long-term strategy.