Meta confirms 1,500 jobs cut in metaverse arm Reality Labs: WSJ

Meta Platforms has laid off roughly 1,500 employees from its Reality Labs division, cutting about 10% of the workforce in the unit that houses its virtual and augmented reality ambitions, according to a person familiar with the matter cited by the Wall Street Journal.

The job cuts mark a further pullback from the metaverse strategy that Chief Executive Mark Zuckerberg once described as the future of the company. Reality Labs has been responsible for developing Meta’s virtual worlds, headsets and related technologies, but has struggled to generate sustained user adoption or commercial returns.

In December, the Wall Street Journal reported that Meta was planning budget reductions across teams working on the metaverse, while redirecting spending towards the development of AI-powered smart glasses and other wearable technologies.

Confirming the shift in priorities, a Meta spokesperson said the cuts were linked to changes in investment strategy. “We said last month that we were shifting some of our investment from Metaverse toward Wearables,” the spokesperson told the Journal. “This is part of that effort.”

Zuckerberg has moved to trim the metaverse group as the technology has failed to gain the traction Meta had anticipated, the Journal previously reported. Despite billions of dollars invested annually, Reality Labs has posted persistent operating losses, becoming a focal point of investor concern as advertising growth slowed and competition intensified across Meta’s core platforms.

Meta rebranded from Facebook in 2021 after 17 years, staking its corporate identity on what it presented as the next phase of online connectivity: immersive, shared virtual environments known as the metaverse. The move was widely seen as a long-term bet designed to reduce reliance on social media advertising.

However, adoption has lagged. A year after the rebrand, the Wall Street Journal reported that Meta’s flagship metaverse platform, Horizon Worlds, had fewer than 200,000 monthly active users. Many user-created virtual “worlds” were rarely, if ever, visited, and internal presentations promoting the product became the subject of online ridicule.

The latest layoffs underscore a broader recalibration under way at Meta, as the company prioritises artificial intelligence and efficiency after multiple rounds of job cuts over the past two years. While Meta continues to describe the metaverse as a long-term opportunity, the near-term focus appears firmly on AI-driven products that promise clearer commercial returns.