Meta Plans to Cut Metaverse Investments by 30 Percent

Meta is planning a cut of up to 30 percent in its 2026 budget for metaverse projects. The cuts may cover Horizon Worlds and Quest units, and layoffs are also on the agenda.

Under the leadership of CEO Mark Zuckerberg, Meta plans to significantly reduce the budget for its metaverse projects. As part of the company’s annual budget planning, it is reported that the budget cut rate for metaverse-focused units, such as the virtual world platform Meta Horizon Worlds and the Quest virtual reality unit, could reach 30 percent for the year 2026.

$70 Billion in Losses According to sources, a cut of this scale could bring layoffs in January. However, according to Bloomberg, a final decision has not yet been made. The reason for the deep cuts is that Meta has not seen the industry-wide competition level it expected in the technology. The majority of the cuts are expected to target virtual reality units and Horizon Worlds, which constitute a large part of metaverse-related spending.

Meta has been gathering its metaverse efforts under the Reality Labs unit since 2021. This unit has recorded a loss of more than $70 billion since 2021. Although Zuckerberg’s belief in the metaverse continues, the CEO’s focus has recently shifted to AI models, AI chatbots, and related hardware products.

Analysts and investors have long expressed that Meta’s Reality Labs products consume resources without generating revenue. While it is known that the Reality Labs unit causes significant financial bleeding, an increase in Meta shares was observed after the news was reflected in the press.

In its statement, Meta said, “Across our Reality Labs portfolio, we are shifting our investments from the Metaverse toward AI glasses and wearable devices, because there is momentum in this area. We are not planning a broader change than this.”

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