Meta Reportedly Plans Deep Metaverse Budget Cuts

• The reduction could involve layoffs and target both the Meta Horizon Worlds platform and the Quest VR unit.
• The metaverse division has been asked to take a deeper cut.
• According to the report, CEO Mark Zuckerberg appears to be redirecting focus toward AI and associated hardware.

Meta Platforms Inc. (META) is reportedly planning substantial budget reductions for its metaverse division, signaling a shift away from the vision that once defined the company’s identity change from Facebook Inc. 

According to a Bloomberg report, executives are considering cuts as large as 30% for 2026. 

Resource Cut Impact 

The reduction could involve layoffs and target both the Meta Horizon Worlds platform and the Quest VR unit, said the report. The metaverse division has been asked to take a deeper cut, as the anticipated competition and widespread adoption of virtual worlds have not materialized as predicted. 

Following the report, Meta’s stock traded over 6% higher in Thursday’s premarket. On Stocktwits, retail sentiment around the stock remained in ‘bearish’ territory, and message volume shifted to ‘low’ from ‘extremely low’ levels in 24 hours. 

The metaverse group operates under Reality Labs, which handles VR headsets, AR glasses, and experimental technologies. Since 2021, Reality Labs has accumulated losses exceeding $70 billion, stated the report. 

Strategic Shift To AI And Hardware

According to the Bloomberg report, CEO Mark Zuckerberg appears to be redirecting focus toward artificial intelligence and associated hardware, such as AI chatbots and large AI models. 

In November, Meta said it would invest $600 billion to expand AI data centers, enhance technology capabilities, and secure a $27 billion funding agreement with Blue Owl Capital to support the construction of its largest data center project worldwide. 

Meta has been rapidly changing its AI strategy in recent months to stay competitive with companies like OpenAI and Google, investing billions of dollars in new infrastructure and hiring efforts.

META stock has gained over 13% in 2025 and over 8% in the last 12 months. 

Also See: Wedbush Backs Snowflake After Q3 Print, Suggests Buying The Dip

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