Meta Trims Metaverse Investment by 30% as Reality Takes Center Stage: Bloomberg

Meta Prepares Deep Cuts to Metaverse Spending as VR Bet Continues to Shrink

Meta is preparing significant reductions to its metaverse ambitions, with layoffs expected at Horizon Worlds and the Quest hardware division as the company scales back its once-massive push into virtual reality, Bloomberg reported, citing people familiar with the matter.

Executives are discussing budget reductions of up to 30% for the metaverse division in 2026, a far deeper cut than the 10% savings reportedly requested across other departments. The unit includes Horizon Worlds—Meta’s flagship social VR platform—and the Quest headset team. The reductions would include staff cuts, according to the report.

The heavier-than-usual trimming reflects the slower-than-expected industry adoption of the metaverse, a stark contrast to Meta’s earlier belief that virtual worlds would define the future of computing. The company invested tens of billions into the initiative after rebranding from Facebook to Meta in 2021, framing VR and immersive digital spaces as the “next frontier.”

But momentum has faded. Horizon Worlds failed to hit mainstream traction, while rivals shifted strategies: Apple pivoted toward spatial computing with the Vision Pro, Microsoft wound down parts of its mixed-reality portfolio, and AI became the new focus across the tech industry.

The largest cuts are expected to hit Meta’s virtual reality group—the costliest component of its metaverse efforts—with Horizon Worlds also slated for reductions.

Despite the pullback, Meta’s stock rose 4% on Thursday following the report and is up more than 10% year-to-date.

Reality Labs, which houses Meta’s metaverse initiatives, has accumulated over $70 billion in losses since early 2021, Bloomberg noted.