Meta will lay off about 10% of its Reality Labs division’s VR team, the New York Times reported.
For those who don’t know, Reality Labs is the division of Meta that develops the Quest headset, Horizon software, smart glasses, and sEMG wristbands, as well as researching future technologies like codec avatars and true AR glasses.
The New York Times estimates Reality Lab’s staff at about 15,000 people and suggests that more than 1,500 people could lose their jobs.
Meta CTO Andrew Bosworth has scheduled an all-hands meeting for tomorrow, both the NYT and Business Insider claim, calling it the “most important” meeting of the year.
Meta confirms that it will “shift some of its funds from the Metaverse to AI Glasses”
Following reports that some of Reality Labs’ budgets will be cut by up to 30%, Meta has officially confirmed that it will “move some of its investments from Metaverse to AI glasses and wearables.”
The report comes just over a month after Meta officially confirmed that it would be “shifting a portion of its investments from the Metaverse into AI glasses and wearables,” a statement that itself followed earlier reporting on the cuts by The New York Times, Wall Street Journal, and Business Insider.
“Within our overall Reality Labs portfolio, we are moving some of our investments from Metaverse into AI glasses and wearables given the momentum,” a statement last month said. “We don’t plan any broader changes than that.”
Layoffs are reportedly occurring this week and we will provide updates as soon as we know which Meta staff members will be affected.
Meta CTO: 2025 will decide if AR/VR bet is visionary or a “legendary misfortune”
In a leaked memo, Meta’s CTO told staff that it will be 2025 before the company’s hardware and Metaverse divisions are determined to be “the work of a visionary or a legendary misfortune.”
Meta’s funding shift from Horizon Worlds and VR to smart glasses comes just over a year after a leaked memo from Meta’s chief technology officer, Andrew Bosworth, told Reality Labs staff that 2025 would determine whether their project was “the work of a visionary or a legendary misfortune.”
In his memo, Bosworth called 2025 “the most important year in eight years at Reality Labs” and told staff “we need to drive sales, retention and engagement across the board, but especially in mixed reality.” At the time, Meta also used MR to refer to VR, but this designation was discontinued earlier this year.
“And to have a chance, Horizon World on mobile absolutely has to break through due to long-term plans,” Bosworth continued.
Since then, Reality Labs posted its highest quarterly revenue ever in Q4 2024 with the launch of the Quest 3S, which became Amazon US’s best-selling game console for Christmas. However, this momentum did not quite continue until 2025.
The first two quarters of 2025 saw Quest sales decline year-over-year, making it clear that while the Quest 3S is a popular stocking stuffer, it simply isn’t a year-round success. Although there was a recovery in the third quarter, this was due to retailers stocking up on Quest 3S for this year’s holiday season, Mehta said.
Meanwhile, Meta wants to expand its platform from the social VR space into a cross-platform Roblox and Fortnite competitor, and continues to push its Horizon Worlds “Metaverse” platform with a multi-million dollar creator competition, with a particular focus on smartphone-only worlds.
Ray-Ban’s meta sales have more than tripled so far this year
So far this year, sales of Ray-Ban Meta glasses have more than tripled and grown more than 200% compared to the same period last year.
This relative stagnation in Meta’s Quest and Horizon Worlds efforts stands in contrast to surging sales and significant public and investor interest in the company’s smart glasses.
In multiple earnings calls last year, Meta partner EssilorLuxottica said Ray-Ban Meta glasses were doing “very well” and sales more than tripled compared to 2024. Both companies claim they are selling many models as quickly as possible.
Meta also claims there is “unprecedented demand” for its high-end Meta Ray-Ban display glasses, and recently announced the postponement of its international expansion plans to catch up with U.S. production.
Update: UploadVR has confirmed that the layoffs include the closure of Twisted Pixel Games (Deadpool VR), Sanzaru Games (Asgard’s Wrath), and Armature Studio (Resident Evil 4 VR).
Meta shuts down Deadpool VR, Wrath of Asgard, Resident Evil 4 VR studios
Meta has shut down Twisted Pixel Games (Deadpool VR), Sanzaru Games (Asgard’s Wrath), and Armature Studio (Resident Evil 4 VR), UploadVR has confirmed.
Update 2: Meta has announced that its VR/MR fitness service Supernatural will no longer receive “new content or feature updates.”
Supernatural will no longer receive new content or features
Meta states that Supernatural will no longer receive “new content or feature updates.”
