Meta Plans to Reduce Reality Labs Workforce by 10%

Meta, the parent company of Facebook, is allegedly preparing to downsize its Reality Labs division, which focuses on metaverse, virtual reality, and augmented reality, by approximately 10% of its staff. According to The New York Times, the announcement of these layoffs could be made as early as today. In a related development, Meta's Chief Technology Officer, Andrew Bosworth, has scheduled a meeting for Reality Labs employees on January 14 and has emphasized the importance of in-person attendance, describing it as the most critical meeting of the year, although he did not provide further details. The Reality Labs division currently employs around 15,000 staff members, out of Meta's total workforce of 78,000. Reports of Meta's plans to reduce Reality Labs staff were first surfaced in December 2025, with the company aiming to cut budgets across the board by up to 30% in 2026. At the time, a Meta spokesperson stated that the company was shifting some of its investments from metaverse to AI glasses and wearables due to their growing momentum, but did not anticipate any broader changes. Reality Labs has reportedly been targeted for deeper cuts due to the lack of significant competition in the metaverse space, and the company has faced pressure over its investment in the sector due to the substantial losses incurred by this division. In February 2025, Meta revealed that while Reality Labs had generated $1.08 billion in revenue for the quarter ending December 31, 2024, it had posted a $4.967 billion operational loss. For the full year 2024, the metaverse-focused arm brought in $2.1 billion in revenue but incurred a loss of $17.7 billion. For the quarter ending September 30, 2025, Reality Labs generated $470 million in revenue and posted a $4.4 billion loss. Meta's Chief Financial Officer, Susan Li, has also forecast lower revenue from the division for the fourth quarter of 2025. Since Facebook rebranded as Meta in 2021, the company has lost over $70 billion on its metaverse plans.