Meta plans to cut about 10% of employees in its Reality Labs division as it pivots from the metaverse to artificial intelligence, according to The New York Times.
The layoffs would affect the unit’s roughly 15,000 workers, particularly those focused on virtual reality headsets and metaverse-based social products.
The move reflects a broader strategy under CEO Mark Zuckerberg to rein in metaverse spending while sharply increasing investment in AI research, data centers and talent, as competition intensifies with rivals such as OpenAI and Google. Meta is also expected to reallocate funds toward its wearables business, including smart glasses and wristband devices.
Reality Labs has consumed tens of billions of dollars since Zuckerberg decided to focus on the metaverse as the next hot tech trend, even changing the company’s name from Facebook to Meta in 2021 to reflect his new priority.
But consumer adoption of VR has lagged. By contrast, Meta’s Ray-Ban smart glasses, tied to augmented reality and AI assistants, have sold more than two million units and are expected to be largely spared from cuts.