WASHINGTON (dpa-AFX) - Meta Platforms (META) is reportedly preparing major cutbacks to its metaverse investments, with a Bloomberg report stating the company will slash next year's Reality Labs budget by roughly 30 percent.
The reductions targeting Meta Horizon Worlds and the Quest VR unit could trigger layoffs as early as January, according to sources familiar with the plans.
The move contrasts with earlier optimism from Reality Labs chief Andrew Bosworth, who had called the coming year one of the most pivotal in the division's history. The cuts come as Meta finalizes its 2026 budget, following a retreat at Mark Zuckerberg's Hawaii estate where executives were again asked to find 10 percent savings across departments.
Most of the pullbacks are expected to hit the VR business, with further reductions planned for Horizon Worlds. Reality Labs, which oversees Meta's long-term AR and VR hardware bets, has accumulated more than $70 billion in losses since 2021, a point that has fueled investor frustration and regulatory scrutiny over child safety and data use in virtual environments.
The report follows earlier layoffs in Oculus Studios and hardware teams, as well as Meta's February cuts of roughly 3,600 jobs, about 5 percent of its global workforce, part of Zuckerberg's push toward a leaner, faster organization.
At the same time, Meta is aggressively expanding its AI ambitions. The company recently formed the Meta Superintelligence Lab, recruiting major figures such as former Scale AI CEO Alexandr Wang and former GitHub CEO Nat Friedman, along with engineers from OpenAI and Apple, underscoring a strategic shift toward advanced AI development.
META currently trades at $666.45, or 4.20% higher on the NasdaqGS.
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