Meta (META) could move further away from the metaverse it once bet its future on.
Executives are discussing budget cuts of up to 30% at the company’s Metaverse division in 2026, according to a Bloomberg report citing people familiar with the discussions. The unit includes Horizon Worlds, Meta’s social virtual reality (VR) platform and its Quest headset. The reductions would include layoffs, the report said.
Meta founder and CEO Mark Zuckerberg has reportedly asked all departments to achieve 10% cost savings, a standard request in recent budget cycles. But the Metaverse team was asked to go further, Bloomberg said, in part because the tech industry as a whole hasn’t embraced the Metaverse as quickly or as fully as Meta once hoped.
The biggest cuts are expected to be in the VR group, which accounts for the majority of Metaverse spending. Horizon Worlds is also likely to see discounts.
Meta shares rose 4% on Thursday following the report. The stock is up more than 10% since the start of the year.
The metaverse refers to a set of interconnected virtual worlds in which people can work, play and socialize using digital avatars, often through virtual reality headsets. At its peak, the idea captured the imagination of Silicon Valley, and companies rushed to invest real estate in VR spaces, buy blockchain-based assets, and come up with new tools for a fully immersive internet.
Meta leaned in harder than anyone. The company pivoted from Facebook to Meta in 2021, committing tens of billions of dollars to what Zuckerberg called the “next frontier” of computing.
But user adoption hasn’t been up to par, and the tech world has shifted its focus. Apple moved into spatial computing with Vision Pro, Microsoft scaled back its own mixed reality projects, and AI became the new battleground.
Meta’s Metaverse Group is owned by the company’s Reality Labs division, which has lost more than $70 billion since the start of 2021, Bloomberg said.
