Meta To Cut 10% Of Metaverse Arm This Week Amid AI Push: Report (2026)

Meta’s Reality Labs is set for cuts as the firm’s metaverse budget continues to decline amid push toward artificial intelligence development.

Meta is reportedly set to lay off around 10% of staff from its metaverse arm this week, as the tech giant focuses its resources on artificial intelligence.

Meta could announce the cuts as soon as Tuesday, the New York Times reported on Monday, citing sources.

Meta’s Reality Labs has around 15,000 staff members. The division focuses on virtual reality (VR) gear such as headsets, as well as operating the firm’s metaverse platforms Horizon Worlds and Horizon Workrooms.

Around 10% of the division’s employees are expected to be cut, around 1,500 people.

Meta has been making gradual cuts to its metaverse budget over the past year as the firm ramped up its focus on artificial intelligence (AI).

In early December, Meta’s shares spiked after reports emerged that the firm was potentially slashing 30% from its metaverse budget and reallocating the funds to AI.

The NYT report also states that Meta plans to reallocate some of its money from Reality Labs to increase the budget of its wearables division, which focuses on smart glasses and wrist-worn devices such as the Meta Neural Band.

The firm, formerly known as Facebook, changed its name to Meta in October 2021 as part of a major pivot from social media to the metaverse, VR and augmented reality.

Meta has lost over $70 billion on Reality Labs since the unit was launched in August 2020, with the arm posting $4.4 billion worth of operational losses in Meta’s last financial earnings report from Q3 2025.

Source: CoinTelegraph