Meta to cut 10% of Reality Labs jobs as AI takes priority

Meta Platforms is set to cut about 10% of jobs in its Reality Labs division, the unit behind its virtual reality and metaverse products. The layoffs are expected to be announced this week, according to a Bloomberg report.

Reality Labs has been one of Meta’s most ambitious projects, housing its long-term push into immersive virtual worlds and VR hardware. The division employs thousands of workers and has absorbed billions of dollars in investment over the years.

The planned job cuts suggest a clear shift in direction, with Meta reallocating resources away from parts of its virtual reality business and towards artificial intelligence and related technologies.

Inside the Reality Labs reset

The decision follows internal budget reviews that began late last year. Meta chief executive Mark Zuckerberg had asked leaders within Reality Labs to identify areas where spending could be reduced, including slowing work on some virtual reality and metaverse products.

While the company has continued to describe the metaverse as a long-term vision, AI has moved to the front of its strategy. The company is now investing heavily in data centres, computing infrastructure, and teams focused on building advanced AI systems.

This shift reflects how the company is responding to user behaviour. AI-powered tools and smart devices are gaining faster adoption, while virtual reality products have struggled to become part of everyday digital life.

A familiar pattern across big tech

Reality Labs has faced ongoing challenges in turning its products into mass-market successes. Despite improvements in VR hardware and social virtual spaces, consumer uptake has remained limited, raising questions about cost and scale.

Also read: China to review Meta’s controversial $2bn Manus AI deal

The latest cuts are also part of a wider trend in the tech industry. Major companies are reducing headcount in experimental or slow-growing units while increasing spending on artificial intelligence, automation, and cloud services.

Microsoft and Amazon both carried out significant layoffs in 2025 as they restructured around AI-first priorities. Meta itself has previously reduced staff across different teams as it adjusted to rising costs and shifting market demands.

Although the company has not indicated it plans to shut down Reality Labs, the move shows a tighter approach to funding long-term projects. Teams working on virtual reality now face greater scrutiny, while AI-led products are becoming the company’s main growth focus.

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