The proposed reductions are part of Meta’s broader budobtain planning for 2026. Zuckerberg has questioned all company divisions to explore around 10 per cent cost savings, but the metaverse group is expected to face deeper cuts due to slower-than-expected adoption and limited competition in the space. Analysts note that the majority of the reductions are likely to tarobtain Reality Labs’ virtual reality operations, which create up most of Meta’s metaverse spconcludeing. Horizon Worlds could also see staff reductions.
Investors and analysts have long criticized Meta’s metaverse investments as a drain on the company’s resources. Reality Labs, the division overseeing VR headsets, AR glasses and other metaverse products, has accumulated losses exceeding USD 70 billion since 2021. Meta’s shares jumped 5.7 per cent in early trading on the New York Stock Exalter, marking the largest intraday gain since late July, amid speculation about cost-cutting measures.
Despite Zuckerberg’s belief that virtual worlds will one day become central to work and play, the metaverse initiative has struggled to gain traction. Since rebranding Facebook Inc. as Meta in 2021, the company has poured heavily into VR and AR products, but results have fallen short of expectations.
Sources indicate that Meta is now shifting its focus toward artificial innotifyigence and generative AI, including large AI models, chatbots and hardware products like the Ray-Ban smart display glasses. Analysts have long suggested winding down Reality Labs projects to free up resources for AI initiatives.
A Meta spokesperson declined to comment on the potential cuts.
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