Meta Platforms Inc. is laying off more than 1,000 employees, or roughly 10% of its Reality Labs division, as the tech giant shifts its focus from metaverse projects to AI-powered wearables.
The cuts, set to be announced Tuesday, mark a significant pivot in the company's hardware and virtual reality strategy.
An internal post from Chief Technology Officer Andrew Bosworth, reviewed by sources, confirmed the layoffs.
Reality Labs, which includes VR headsets, AI glasses, and other futuristic products, has lost over $70 billion since 2021, including a $4.4 billion operating loss in the third fiscal quarter alone.
"We said last month that we were shifting some of our investment from metaverse toward wearables," a Meta spokesperson told FOX Business.
"This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year."
The metaverse—a virtual world where users can socialize, work, and play—has been a costly venture for Meta.
High-end VR headsets and digital features, including avatars, were developed to compete with rival tech companies, but adoption has lagged behind expectations.
#Meta Platforms is cutting over 1,000 jobs about 10% of its Reality Labs division to shift focus from virtual reality and #metaverse projects toward AI wearables and phone features. Employees began being notified Tuesday, according to CTO Andrew Bosworth. pic.twitter.com/9ImoeRQRib
— Political Uprising (@Political_Up) January 13, 2026
Meta aims to produce 20M AI-powered glasses
As a result, Meta is now concentrating its metaverse software team, Horizon, on mobile devices, where the potential user base and growth rate are far higher.
"With the larger potential user base and the fastest growth rate today, we are shifting teams and resources almost exclusively to mobile to continue to accelerate adoption there," Bosworth wrote.
Meta is also collaborating with EssilorLuxottica SA, the parent company of brands like Ray-Ban and Oakley, to expand production of AI-powered smart glasses.
Sources familiar with the matter told Bloomberg that Meta aims to increase annual capacity to 20 million units or more by the end of 2026.
In addition to workforce reductions, Meta is closing three in-house VR content and game studios: Armature, Sanzaru, and Twisted Pixel. Supernatural, a VR fitness studio, will continue supporting existing products but will no longer create new content.
Five other studios, including Beat Games and BigBox, will remain active, with the company shifting resources toward third-party developers.
"Gaming remains the cornerstone of our ecosystem," said Tamara Sciamanna, director of Oculus Studios, in an internal memo.
"With this change we are shifting our investment to focus on our third-party developers and partners to ensure long-term sustainability."
Meta shares fell 1.9% in early trading Tuesday as the company navigates the costly transition.
Originally published on vcpost.com
