Meta Stock: Company Dumps 1,500 Metaverse Jobs After $70B Loss

TLDR

• Meta is eliminating roughly 1,500 positions from Reality Labs, representing 10% of its metaverse workforce.
• The cuts come as Meta redirects investment from virtual reality projects to artificial intelligence initiatives.
• Reality Labs has lost over $70 billion since 2020, with Q3 2025 showing $4.4 billion in operating losses.
• User engagement remains weak, with Horizon Worlds reportedly drawing under 900 daily active users.
• Some metaverse funding will shift to Meta’s wearables division for smart glasses and neural band development.

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Meta is moving forward with layoffs affecting its metaverse division. The company plans to cut approximately 1,500 employees from Reality Labs this week.

The New York Times reported the cuts could be announced Tuesday. Sources familiar with the matter confirmed the workforce reduction.

Reality Labs currently employs about 15,000 people. The division handles virtual reality headsets and platforms like Horizon Worlds and Horizon Workrooms.

Meta Platforms, Inc., META

The 10% reduction comes as Meta increases its artificial intelligence investment. The company has been gradually scaling back metaverse spending throughout the past year.

Meta did not respond to requests for comment. The tech giant has been adjusting its budget priorities for months.

Billions Lost on Virtual Reality Bet

Meta launched Reality Labs in August 2020. The unit has accumulated more than $70 billion in losses since inception.

The division reported $4.4 billion in operating losses during Q3 2025. Those numbers appeared in Meta’s latest quarterly earnings.

The company rebranded from Facebook to Meta in October 2021. CEO Mark Zuckerberg positioned the move as a bet on virtual and augmented reality.

Early December saw Meta’s stock rise on budget cut reports. The company was reportedly considering a 30% reduction in metaverse spending.

That money would flow to AI projects instead. The current plan also includes moving some Reality Labs funds to the wearables division.

User Adoption Falls Short of Expectations

The wearables group develops smart glasses and wrist-worn devices. Products include the Meta Neural Band currently in development.

Gaming platforms like Roblox and Fortnite dominate metaverse engagement. These services attract hundreds of millions of daily users.

Other virtual world projects struggle to build audiences. Blockchain-based metaverses show particularly low activity.

The Sandbox recorded only 776 unique active wallets over 30 days. DappRadar provided those engagement metrics.

Reports suggest Horizon Worlds sees fewer than 900 daily active users. The platform has failed to achieve mainstream adoption.

Zuckerberg previously called 2025 a “pivotal year” for metaverse growth. He continues to express optimism about the technology’s future.

The workforce reduction reflects Meta’s changing strategic priorities. AI competition has intensified across the technology sector.

Meta faces pressure to match rival companies investing in AI infrastructure. The Reality Labs cuts mark another round of workforce adjustments.

The company has not specified which positions or regions will face elimination. Product line details remain unclear.

Sources indicate the announcement will come Tuesday, with affected employees notified this week.

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