Meta Platforms Inc. has implemented another round of layoffs within its Reality Labs division, the unit responsible for developing its metaverse and extended reality (XR) technologies. The move, which affects an undisclosed number of employees, is part of the tech giant’s broader efforts to streamline operations and reallocate resources more efficiently amid ongoing financial pressures.
Reality Labs has been at the forefront of Meta's ambitious pivot toward immersive technologies, encompassing virtual reality (VR), augmented reality (AR), and the development of hardware such as the Meta Quest headsets and AR glasses. Despite the division being central to CEO Mark Zuckerberg’s long-term vision of a connected digital universe, Reality Labs has consistently posted steep losses—reportedly losing over $15 billion since 2022.
Sources close to the company said the recent layoffs primarily impact teams involved in non-core research initiatives and prototype development. Some affected employees worked on long-term hardware projects that have now been paused or deprioritized.
Meta confirmed the job cuts in a brief statement, emphasizing that the changes are part of a restructuring to "focus on key priorities" and "ensure long-term sustainability and innovation" within the XR space.
“We remain fully committed to our vision for the metaverse and the development of next-generation computing platforms,” a Meta spokesperson said. “These changes are necessary to optimize our resources and accelerate progress on our highest-impact initiatives.”
This move comes as Meta faces increased scrutiny from investors over the profitability and real-world viability of its metaverse strategy. While Reality Labs has delivered popular consumer devices—such as the Meta Quest 3 headset launched in 2023—adoption of immersive platforms like Horizon Worlds has fallen short of expectations.
The company has also been navigating a difficult macroeconomic environment, leading to several rounds of workforce reductions across its broader operations since 2023. The latest job cuts mark the continuing trend of tech firms reassessing their moonshot projects in favor of more immediate revenue-generating ventures.
Industry analysts say Meta's decision to trim Reality Labs could signal a more pragmatic phase in the company’s metaverse journey, potentially prioritizing applications with clearer commercial potential, such as enterprise AR tools and AI integration within VR environments.
Despite the challenges, Meta says it will continue investing heavily in core XR technologies, including upcoming iterations of its Quest hardware and AR wearables, which are expected to play a role in its long-term ecosystem strategy.
Employees affected by the cuts are reportedly being offered severance packages, job placement assistance, and access to internal mobility programs.