Meta Cutting Reality Labs Workforce by 10%

That’s according to a report Monday (Jan. 12) by Bloomberg News, which characterizes the move as part of a larger plan by Meta to reduce its focus on virtual reality products as it concentrates on other artificial intelligence (AI) wearables.

The layoffs in the roughly 15,000-person division are expected this week, the report said, citing a source familiar with the company’s plans who wasn’t permitted to speak publicly. 

The news follows earlier reports that Meta CEO Mark Zuckerberg had executives to find ways to reduce Reality Lab’s budget, including by cutting some virtual reality and metaverse products. The division has been losing billions each quarter for the last several years.

The metaverse effort has also been questioned by investors who view it as a waste of resources and criticized by watchdogs who argue that its virtual worlds present a threat to children’s privacy and safety.

Executives had discussed budget cuts of up to 30% for Reality Lab’s metaverse group, Bloomberg added. PYMNTS has contacted Meta for comment but has not yet gotten a reply.

“Just a few years ago, the metaverse looked like the next platform shift, promising immersive digital worlds where people would live, work and transact at scale,” PYMNTS wrote last month.

“Today, Meta’s virtual universe is not dead, but it certainly has shrunk and left is a sobering record of investment, stalled consumer adoption and a set of hard lessons about how innovation in payments and commerce really happens.”

In a column in 2023, PYMNTS CEO Karen Webster argued that the term “metaverse” had been co-opted by Meta’s rebranding and a wave of hype that shifted funds and attention from technologies aimed at addressing problems in the physical world.

“Now, the company is tilting its capital plan toward data centers, cloud contracts and AI talent, and integrating artificial intelligence features across its existing apps, where users already spend time and money,” PYMNTS added.

News of the layoffs come a week after Meta said it was delaying a global launch of its smartglasses amid steep demand among U.S. consumers.

“Meta Ray-Ban Display is a first-of-its-kind product with extremely limited inventory,” the company wrote on its blog. “Since launching last fall, we’ve seen an overwhelming amount of interest, and as a result, product waitlists now extend well into 2026.”

Due to this “unprecedented demand and limited inventory,” the Facebook parent said it would halt the international expansion of the glasses to the U.K., France, Italy and Canada, which had initially been slated for the early part of this year.