Meta (META) may be moving further away from the metaverse it once staked 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 talks. The unit includes Horizon Worlds, Meta’s social virtual reality (VR) platform, and its Quest headset unit. The cuts would include layoffs, according to the report.
Meta founder and CEO Mark Zuckerberg reportedly asked all departments to find 10% cost savings, a standard request during recent budget cycles. But the metaverse team was asked to go deeper, Bloomberg said, in part because the broader tech industry has not embraced the metaverse as quickly or as fully as Meta had hoped.
The biggest reductions are expected to fall on the virtual reality group, which accounts for the majority of metaverse-related spending. Horizon Worlds is also likely to see cuts.
Meta shares rose 4% on Thursday following the report. The stock is up more than 10% so far this year.
The metaverse refers to a collection of interconnected virtual worlds where 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 stake out real estate in virtual reality spaces, buy blockchain-based assets and launch new tools for a fully immersive Internet.
Meta bowed harder than anyone else. 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 was not enough and the world of technology changed its focus. Apple moved toward spatial computing with Vision Pro, Microsoft scaled back its own mixed reality plans, and AI became the new battleground.
Meta’s metaverse group belongs to the company’s Reality Labs division, which has lost more than $70 billion since the beginning of 2021, Bloomberg said.
