Meta is laying off around 10% of its Reality Labs division, specifically targeting VR and Horizon Worlds, The New York Times reports.
Reality Labs, if you’re unaware, is the division of Meta behind its Quest headsets, Horizon software, smart glasses, and sEMG wristband, as well as researching future technologies such as Codec Avatars and true AR glasses.
The New York Times estimates Reality Labs at roughly 15,000 staff, suggesting that more than 1500 could be losing their job.
Meta CTO Andrew Bosworth has scheduled an all-hands meeting for tomorrow, both the NYT and Business Insider claim, describing it as the “most important” of the year.
Meta Confirms “Shifting Some” Funding “From Metaverse Toward AI Glasses”
Meta has officially confirmed “shifting some of our investment from Metaverse toward AI glasses and Wearables”, following reports of an up to 30% budget cut for parts of Reality Labs.
The report comes just over a month after Meta officially confirmed “shifting some of our investment from Metaverse toward AI glasses and Wearables”, a statement which itself followed early reports of the cuts from The New York Times, The Wall Street Journal, and Business Insider.
“Within our overall Reality Labs portfolio we are shifting some of our investment from Metaverse toward AI glasses and Wearables given the momentum there,” last month’s statement read. “We aren’t planning any broader changes than that.”
With the layoffs reportedly taking place this week, we’ll bring you updates as we learn of Meta staff affected.
Meta CTO: 2025 Will Determine Whether AR/VR Bet Is Visionary Or “A Legendary Misadventure”
In a leaked memo, Meta’s CTO told staff that 2025 will determine whether its hardware & metaverse division is “the work of visionaries or a legendary misadventure”.
Meta’s funding shift from Horizon Worlds and VR to smart glasses is happening just over a year after a leaked memo from Meta CTO Andrew Bosworth told Reality Labs staff that 2025 will determine whether their projects are “the work of visionaries or a legendary misadventure”.
In the memo, Bosworth described 2025 as “the most critical year in my 8 years at Reality Labs”, and told staff they “need to drive sales, retention, and engagement across the board but especially in MR”. Note that at the time, Meta was using MR to refer to VR too, a nomenclature that it ended earlier this year.
“And Horizon Worlds on mobile absolutely has to break out for our long term plans to have a chance”, Bosworth followed that sentence with.
Since then, Reality Labs saw its highest-ever quarterly revenue in Q4 2024 with the launch of Quest 3S, which was the top-selling console on Amazon US for Christmas. But this momentum did not carry through into 2025 at all.
The first two quarters of 2025 saw Quest sales decline year-over-year, revealing that while Quest 3S was a popular stocking stuffer, it simply is not a successful year-round product. While Q3 saw a rebound, Meta explained that this was due to retailers stocking up on Quest 3S for this year’s holiday season.
Meanwhile, Meta has continued to push its Horizon Worlds “metaverse” platform with multi-million-dollar creator competitions, especially focused on smartphone-only worlds, as the company hopes to scale the platform from a social VR space to a cross-platform Roblox and Fortnite competitor.
Ray-Ban Meta Sales Have More Than Tripled This Year So Far
Sales of Ray-Ban Meta glasses so far this year have more than tripled compared to the same time last year, more than 200% growth.
This relative stagnation in Meta’s Quest and Horizon Worlds effort is contrasted with skyrocketing sales and significant public and investor interest in its smart glasses.
In multiple earnings calls last year, Meta’s partner EssilorLuxottica said that the Ray-Ban Meta glasses were performing “exceptionally well”, with sales having more than tripled compared to 2024. Both companies have claimed to be selling many models as fast as they can make them.
Meta has also claimed “unprecedented demand” for its higher-end Meta Ray-Ban Display glasses, recently announcing a delay of its international expansion plans to catch up with US production.
UPDATE: UploadVR can confirm that the layoffs include the closure of Twisted Pixel Games (Deadpool VR), Sanzaru Games (Asgard’s Wrath), and Armature Studio (Resident Evil 4 VR).
Meta Closes Deadpool VR, Asgard’s Wrath & Resident Evil 4 VR Studios
Meta has shut down Twisted Pixel Games (Deadpool VR), Sanzaru Games (Asgard’s Wrath), and Armature Studio (Resident Evil 4 VR), UploadVR can confirm.
UPDATE 2: Meta announced that its VR/MR fitness service Supernatural will no longer receive any “new content or feature updates”.
Supernatural Will No Longer Receive New Content Or Features
Meta says Supernatural will no longer receive any “new content or feature updates”.
