META may retreat even further from the Metaverse that once staked its future.
Bloomberg reports that executives are discussing budget cuts of up to 30% for the company’s Metaverse unit in 2026, citing people familiar with the discussions. The unit includes Meta’s social virtual reality (VR) platform, Horizon Worlds, and its Quest headset unit. The report said the job cuts include layoffs.
Meta founder and CEO Mark Zuckerberg reportedly asked all departments to find 10% cost savings, a standard request in recent budget cycles. But Bloomberg said the Metaverse team was asked to dig deeper, in part because the broader technology industry hasn’t embraced Metaverse as quickly or as fully as once hoped.
The largest reductions are expected to be in the virtual reality group, which accounts for the bulk of Metaverse-related spending. Horizon Worlds may also be cut.
Meta shares rose 4% on Thursday following the news. The stock price has increased more than 10% since the beginning of the year.
The metaverse refers to a collection of interconnected virtual worlds in which people can work, play, and interact using digital avatars (often via virtual reality headsets). At its peak, the idea captured the imagination of Silicon Valley, and companies scrambled to stake out real estate in the VR space, snap up blockchain-based assets, and tout new tools for a fully immersive internet.
Meta leaned forward more eagerly than anyone else. The company rebranded from Facebook to Meta in 2021 and has spent tens of billions of dollars on what Zuckerberg called the “next frontier” in computing.
However, user adoption did not materialize, and the technology industry shifted its focus. Apple moved into spatial computing with Vision Pro, Microsoft scaled back its own mixed reality plans, and AI became the new battleground.
Meta’s Metaverse Group is part of the company’s Reality Labs division, which has lost more than $70 billion since the beginning of 2021, according to Bloomberg.