Meta has announced another round of layoffs, this time affecting over 100 employees in its Reality Labs division, which is responsible for developing and marketing the company's Quest headset line, focused on augmented and virtual reality technologies. The cuts have come as part of Meta's ongoing restructuring efforts following a significant financial loss in Q4 2024.

According to reports from Bloomberg and Reuters, the job cuts primarily impacted teams within Oculus Studios, Meta's in-house game development arm for its virtual reality headsets. Among those directly affected by the layoffs were employees working on Supernatural, a popular VR fitness game, alongside other titles developed for the Quest VR platform.

In a statement addressing the layoffs, Meta spokesperson Tracy Clayton noted that the changes were part of a broader effort to improve efficiency within the Studios division. Clayton stated, “These changes are meant to help Studios work more efficiently on future mixed reality experiences for our growing audience.”

Despite the job cuts, Meta has expressed its continued commitment to the mixed reality space. Clayton further emphasised that the company remains focused on its investments in mixed reality experiences, including games and fitness apps. “We remain committed to investing in mixed reality experiences, including fitness and games, and our drive to deliver the best experiences possible for the Quest and Supernatural communities remains unchanged,” she said.

The layoffs come as Meta struggles to recover from a reported loss of $4.97 billion in Q4 2024 for its Reality Labs division, which saw significantly higher losses compared to the previous quarter. In contrast, the company posted $1.1 billion in revenue during the same period, highlighting the growing challenges the company faces in turning a profit from its investments in virtual and augmented reality.

In addition to the layoffs, Meta is currently embroiled in an antitrust trial, which entered its second week on April 14. The Federal Trade Commission (FTC) has accused Meta of engaging in anticompetitive practices, particularly through its acquisition strategy. The FTC has highlighted a 2012 email in which Meta CEO Mark Zuckerberg discussed acquiring Instagram to "neutralise a competitor" and prevent the rise of alternative social media platforms. Further documents from 2018 reveal that Zuckerberg had considered the possibility of being forced to spin off Instagram and WhatsApp due to growing antitrust scrutiny.

As the trial continues, Meta’s commitment to mixed reality and its broader strategic direction remain under intense scrutiny. However, the layoffs and the financial losses in Reality Labs signal the significant challenges the company faces in maintaining its vision for the future of virtual and augmented reality technologies.

Meta's investment in mixed reality technologies has long been a key part of its plan for the next phase of its growth. However, the combination of job cuts, financial losses, and ongoing legal battles underscores the turbulent path ahead for the tech giant as it seeks to carve out a dominant position in the rapidly evolving virtual reality market.

For the 100 employees impacted by the recent layoffs, their departure marks the end of a chapter in the development of some of Meta’s most ambitious virtual reality projects. The company has expressed gratitude for their contributions, with an official message shared on the Supernatural Facebook group stating, “Their contributions have been instrumental in shaping our journey and yours, and their absence will be deeply felt.”

While Meta’s leadership insists that the layoffs are part of efforts to streamline operations, the cuts signal the ongoing difficulties the company faces as it attempts to balance its ambitious technological vision with the financial realities of a highly competitive and evolving market. With the antitrust trial continuing and the company under pressure to prove the viability of its investments, the coming months could prove critical for Meta’s future in the mixed reality space.