Meta plans to cut about 10% of employees in Reality Labs business

SAN FRANCISCO — Meta plans to cut about 10% of the employees in its Reality Labs division who work on products including the metaverse, according to three people with knowledge of the discussions, as the company shifts priorities to build next-generation artificial intelligence.

The cuts to Reality Labs — which has roughly 15,000 employees — could be announced as soon as Tuesday. The layoffs would be a fraction of Meta’s total workforce of 78,000, but are set to disproportionately affect those in the metaverse unit who work on virtual reality headsets and a VR-based social network, said the people, who asked not to be identified since they were not authorized to discuss confidential decisions. The cuts could end up affecting more than 10% of the division, one of the people said.

Meta in Seattle
Meta had about 8,000 employees in the Seattle area as of 2024. Its footprint in the Puget Sound region expanded during the COVID-19 pandemic, fueled by the company’s Reality Labs ambitions. Aside from offices in Seattle and Bellevue, Meta occupies multiple buildings in the Willows area of Redmond. Many of those are devoted to lab space, where the company develops its augmented reality goggles and glasses.

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Andrew Bosworth, Meta’s chief technology officer who oversees Reality Labs, has called a meeting for Wednesday and has urged staff to attend in person, according to a memo sent to employees last week, which was obtained by The New York Times. Bosworth said the meeting was the “most important” of the year but did not elaborate.

Meta CEO Mark Zuckerberg asked top executives last year to make cuts in their 2026 budgets while he pours money into AI research. As Meta faces competition from companies such as OpenAI and Google, Zuckerberg has increased the budget for TBD Lab, the skunk works unit at Meta that aims to build superintelligence, a godlike AI system.

The company also plans to reallocate some of the money from virtual reality products to increase the budget for its wearables division, which builds smart glasses and wristband computing devices.

The layoffs are set to pump the brakes on building virtual reality for the metaverse, Zuckerberg’s far-flung vision of what social networking could look like in a VR-based version of the internet. He has chased that vision since 2014, when he bought Oculus, a virtual reality startup that became the foundation for Meta’s hardware division. In 2021, Zuckerberg rebranded the company Meta, officially moving away from its Facebook name.

But consumers have not flocked to buy Meta’s virtual reality headsets, even as the company has spent tens of billions of dollars building them.

At the same time, investors have grown wary of Meta’s spending as it has ratcheted up its work on artificial intelligence. The company expects to invest tens of billions of dollars on data centers, the computing facilities that power AI development, and it has handed out lavish pay packages to hire top AI researchers.

Meta declined to comment. In December, a company spokesperson said Meta was “shifting some of our investment from Metaverse toward AI glasses,” and was not planning “any broader changes.”

Bosworth’s memo was earlier reported by Business Insider.

Even as the AI race has ramped up, Meta has said it is not giving up on the metaverse. But the Silicon Valley company appears to be redefining exactly what that might look like.

The Reality Labs division that works on augmented reality, which builds hardware like glasses and wristbands that allow people to interact with computing menus and commands using voice and gesture commands, is expected to be largely spared from the cuts, two of the people said. That division is responsible for Meta’s Ray-Ban sunglasses, which have incorporated a camera and personal AI assistant. The glasses have been a surprise hit, selling more than 2 million units over the past few years, the company has said.

The augmented reality division is also responsible for the Ray-Ban Display smart glasses, which have a digital menu inside the lenses that can be navigated with a hardware wristband. At an industry event in Las Vegas last week, Meta said it was delaying the rollout of the Display glasses internationally, citing limited inventory and “unprecedented demand.”

On a call with investors in July, Zuckerberg said the smart glasses would be “the main way that we integrate superintelligence into our day-to-day lives.”