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After years of heavy spending and limited traction, Mark Zuckerberg’s bet on the metaverse appears to be nearing its end. Meta, which rebranded itself around a virtual future, has started scaling back the department that once embodied an ambitious project.
This week, the Wall Street Journal reported that Meta laid off around 1,500 employees from Reality Labs, the unit responsible for virtual and augmented reality products. The cuts represent nearly 10 percent of the division’s workforce.
Meta layoffs began with the closure of three VR game studios. Its flagship social VR platform, Horizon Worlds, remains operational but in a reduced form, according to IGN.
Reality Labs has long struggled to justify its scale. Since its creation in 2020, the division has reportedly spent more than $77 billion, with little evidence of mass adoption or profitability.
Meta says the move reflects a broader change in priorities. A company spokesperson told the WSJ that Meta has begun redirecting investment away from the metaverse toward wearables, including AI-powered devices.
The retreat has been visible for some time. Industry analysts note that Zuckerberg began downplaying the metaverse during earnings calls as early as 2023, even as losses mounted. Many described the current pullback as inevitable and overdue.
Meta is now betting on AI smart glasses as its next growth engine. But that push faces early challenges. Last week, the firm suspended worldwide delivery of the gadgets due to an inventory shortage; at the same time, operators forecast that privacy rules and a saturated market could limit demand.
Bloomberg reported that Meta's management has discussed increasing production from 10 million units to 20 million, with internal forecasts reaching 30 million units by the close of 2026 if demand remains stable.
Also Read: Meta slashes Reality Labs, shuts VR game studios amid pivot
Meta’s current direction is clear. As the company doubles down on AI wearables, the metaverse, once central to the tech giant’s identity, continues to fade, marking the quiet end of one of Silicon Valley’s most expensive experiments.
