Meta (META) may be retreating even further from the metaverse it once staked its future on.
Executives are discussing budget cuts of up to 30% in the company’s metaverse division by 2026, according to a Bloomberg report citing people familiar with the talks. The device includes Horizon Worlds, Meta’s social virtual reality (VR) platform, and its Quest headset device. The cuts will include layoffs, the report said.
Meta founder and CEO Mark Zuckerberg reportedly asked all departments to find 10% in cost savings, a standard request during recent budget cycles. But the metaverse team was asked to go deeper, Bloomberg said, in part because the broader tech industry hasn’t embraced the metaverse as quickly or as fully as Meta once expected.
The biggest reductions are expected to fall on the virtual reality group, which accounts for the majority of metaverse-related spending. Horizon Worlds will likely see cuts as well.
Meta shares rose 4% on Thursday after the report. The stock is up over 10% year to date.
The metaverse refers to a collection of interconnected virtual worlds where people can work, play, and socialize using digital avatars, often through virtual reality headsets. At its height, the idea captured the imagination of Silicon Valley, and companies sought to stake real estate in the VR space, buying up blockchain-based assets and pitching new tools for a fully immersive internet.
Meta leaned in harder than anyone else. The company morphed from Facebook to Meta in 2021, committing tens of billions of dollars to what Zuckerberg called “the next frontier” in computing.
But user adoption fell short, and the tech world shifted focus. Apple moved toward 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 Reality Labs division of the company, which has lost more than $70 billion since the start of 2021, Bloomberg said.
