Meta Cuts 10% of Metaverse Staff Amid Shift to AI-Powered Wearables

Meta reportedly laid off 1,500 people from its Reality Labs division, which is the home of its virtual and augmented reality business.

The layoffs amount to 10% of the division’s staff, The Wall Street Journal (WSJ) reported Wednesday (Jan. 14).

“We said last month that we were shifting some of our investment from Metaverse toward Wearables,” a Meta spokesperson told WSJ. “This is part of that effort.”

This report came on the same day the company said that it will announce its fourth quarter and full year 2025 results on Jan. 28.

It was reported Monday (Jan. 12) that Meta planned to eliminate 10% of the jobs in the Reality Labs unit as part of the company’s larger plan to reduce its focus on virtual reality products as it concentrates on other artificial intelligence (AI) wearables.

On Dec. 4, it was reported that the company was considering cutting as much as 30% of the budget of its metaverse group amid a shift of resources toward AI.

PYMNTS reported in December that while Meta’s metaverse is not dead, it has shrunk and left a sobering record of investment, stalled consumer adoption and a set of hard lessons about how innovation in payments and commerce really happens.

In October, PYMNTS reported that Meta’s building of infrastructure without a clear definition of what success looks like potentially derailed the company’s metaverse. At that point, Reality Labs’s operating losses exceeded $4 billion per quarter.

That same report added that Meta was pouring billions of dollars into its biggest AI bet and that Meta CEO Mark Zuckerberg told analysts during an October earnings call that he is “very focused on establishing Meta as the leading AI frontier lab.”

Meta’s AI-powered wearables are reportedly seeing demand outpace the current supply. It was reported Tuesday (Jan. 13) that the company and eyewear maker EssilorLuxottica are considering doubling their capacity to produce Ray-Ban Meta smart glasses from 10 million to 20 million by the end of the year and to 30 million if demand continues to grow.

Meta said on Jan. 6 that it paused a planned global expansion of the smart glasses due to “unprecedented demand and limited inventory” in the United States.