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2h ago

Meta to Cut About 10% of Reality Labs as AI Takes Priority

The restructuring reflects a pivot to large-scale AI investment following years of steep Reality Labs losses.

A bicyclist rides past a Meta sign outside of the company’s headquarters in Menlo Park on March 7, 2023. 
Mark Zuckerberg of Meta. The Bay Area tech company is preparing to lay off hundreds of employees in its Reality Labs division this week, as it shifts resources away from the metaverse and toward artificial intelligence, according to a report.
FILE — Michael Abrash, chief scientist of Reality Labs at Meta, speaks during a presentation at Meta Connect in Menlo Park, Calif., Sept. 18, 2025. Meta plans to cut around 10 percent of the employees in its Reality Labs division who work on products including the metaverse, according to three people with knowledge of the discussions, as the company shifts priorities to build next-generation artificial intelligence. (Jason Henry/The New York Times)
Meta CTO Andrew Bosworth, who heads the Reality Labs unit.

Overview

  • The company is expected to announce the reductions as soon as Tuesday, trimming roughly 1,500 of the unit’s about 15,000 roles, according to multiple reports.
  • Teams working on virtual reality headsets and the Horizon Worlds social platform are set to be hit hardest, while augmented-reality wearables such as Ray-Ban smart glasses are largely expected to be spared.
  • Meta is reallocating funding from some metaverse projects toward artificial intelligence initiatives, AI-capable wearables, and major compute buildouts, and the company declined to comment on the reported cuts.
  • Reality Labs has recorded more than $60 billion in cumulative losses since 2020, including a recent quarter with about $4.4 billion in losses on roughly $470 million in revenue.
  • CTO Andrew Bosworth called a division-wide meeting for Wednesday that he labeled the year’s most important and urged in-person attendance, as recent moves like a data-center expansion plan and the hiring of Dina Powell McCormick underscore the AI focus.