Meta reportedly to cut about 10% of Reality Labs staff as it shifts focus to AI

Meta is reportedly set to lay off around 10% of staff from its metaverse arm, Reality Labs, this week, the New York Times reported, citing sources close to the matter. Reality Labs has around 15,000 staff, and the cuts are expected to hit about 10% of the division — roughly 1,500 people — according to the report.

The division develops virtual reality gear such as headsets and operates metaverse platforms Horizon Worlds and Horizon Workrooms, and the move comes as the firm focuses its resources on artificial intelligence. The NYT report said Meta plans to reallocate some Reality Labs money to increase the budget of its wearables division, which focuses on smart glasses and wrist-worn devices such as the Meta Neural Band.

Meta has been reducing its metaverse budget over the past year and reportedly considered cutting about 30% of that budget in early December to bolster AI spending. Meta has lost over $70 billion on Reality Labs since the unit launched in August 2020, and the arm posted $4.4 billion in operating losses in Meta’s last financial earnings report from Q3 2025.

User adoption of metaverse platforms has remained limited: gaming-oriented platforms like Roblox and Fortnite have hundreds of millions of daily users, while others show minimal activity — The Sandbox had 776 unique active wallets in the past 30 days per DappRadar, and some have even claimed Horizon Worlds sees fewer than 900 daily active users.

Key Topics

Tech, Meta, Reality Labs, Horizon Worlds, Horizon Workrooms, Meta Neural Band