Meta reportedly cuts Reality Labs staff and pivots from metaverse to AI

Meta reportedly laid off roughly 1,500 employees from its Reality Labs division — about 10% of the unit’s staff — and shut down several VR game studios, according to The Wall Street Journal. Multiple outlets reported studios and projects affected: CNBC named Armature Studio, Twisted Pixel and Sanzaru as casualties inside Meta; the VR fitness app Supernatural, acquired in 2023 for $400 million, will move into “maintenance mode”; GeekWire reported layoffs at Camouflaj; and The Verge said Meta’s Workrooms program is shutting down.

Bloomberg had earlier reported the company cut Reality Labs’ budget by up to 30% and paused a program to share its Meta Horizon operating system with third-party headset makers. The build-out of the metaverse had been expensive and unprofitable. TechCrunch reported Meta had funneled about $73 billion into Reality Labs and the division had never turned a profit.

Counterpoint Research said global VR headset shipments fell 12% year-over-year in 2024 while Meta accounted for 77% of those shipments. App-intelligence firm Apptopia modeled 60.4 million global downloads of the Meta Horizon app since May 2018 and U.S. average sessions per daily active user rose from 3.49 in January 2023 to 4.93 in January 2026, compared with Meta’s more than 3.5 billion daily active users across its social apps.

Key Topics

Tech, Meta, Reality Labs, Horizon Worlds, Supernatural, Ray-ban Ar