At a Glance
- Meta will cut roughly 1,500 Reality Labs employees-about 10% of the division
- The move follows a 30% budget slash for VR/AR projects and a sharp pivot to AI infrastructure
- CTO Andrew Bosworth has called an all-hands meeting for the day after the public announcement
- Why it matters: The cuts signal Meta’s retreat from its multibillion-dollar metaverse bet and its scramble to compete in the AI arms race
Meta is preparing to eliminate approximately 10% of its Reality Labs workforce, affecting about 1,500 people, according to an anonymously-sourced New York Times report cited by Derrick M. Collins. The layoffs could be announced as early as Tuesday, with Meta CTO Andrew Bosworth scheduling what he called the division’s “most important” meeting of the year for Wednesday-an in-person gathering meant to address the aftermath.
The division, once known as Oculus, was founded by Palmer Luckey and funded through a 2012 Kickstarter campaign. Facebook (now Meta) acquired Oculus in 2014 for $2 billion, rebranding the unit as Reality Labs and tasking it with building the hardware and software for CEO Mark Zuckerberg’s metaverse vision. Its current portfolio includes Quest VR headsets, Ray-Ban Stories smart glasses, and the Horizon Worlds social platform.
Reality Labs has ballooned to about 15,000 employees, making the expected cuts the largest single reduction in the unit’s history. The division has already burned through $50 billion in operating losses since 2020, according to Meta’s own filings, without producing a breakout consumer hit.
News Of Fort Worth colleague James Pero flagged last month that a 30% budget cut was looming for Reality Labs, noting the reduction would not kill the metaverse project outright but would force a “clear shift in priorities” toward artificial-intelligence initiatives. That forecast now appears to have been conservative.
On Monday, Meta doubled down on AI by unveiling Meta Compute, a plan to build “tens of gigawatts” of new data-center capacity before 2030. The company measures compute crudely in gigawatts-roughly the electricity demand of a major U.S. city-meaning the expansion could eventually require more power than ten San Franciscos but less than one hundred.
The same day, Meta hired Dina Powell McCormick, a former advisor to Republican presidents George W. Bush and Donald Trump and ex-Goldman Sachs executive, as president and vice chair. Her mandate includes smoothing relations with regulators and local communities as Meta races to secure land, power, and permits for the new AI facilities.
CEO Mark Zuckerberg framed the infrastructure buildout as a strategic advantage in a statement released Monday. The phrase echoed his 2022 defense of metaverse spending, when he told investors that “enabling more experiences is really the primary driver and then the sort of fortification against external risks is certainly a strategic advantage over the long-term.”
The timing of the layoffs, budget cuts, and data-center blitz underscores how quickly Meta has reordered its priorities. Reality Labs employees learned of the impending job losses not from internal memos but from media reports, heightening anxiety across the division. Sources told News Of Fort Worth that teams working on Horizon Worlds and unannounced AR glasses have already been told to freeze hiring and cap travel budgets.
Meta has not disclosed severance terms for the affected workers, though past rounds offered 16 weeks of pay plus two additional weeks per year of service. The company is expected to file a regulatory notice within days detailing the financial impact.
Key Takeaways
- 1,500 Reality Labs jobs-10% of the division-are on the chopping block
- A 30% budget reduction foreshadowed the cuts, signaling a strategic pivot from VR to AI
- Meta’s new Meta Compute plan commits to data centers rivaling major cities in power demand
- The shake-up marks the end of Zuckerberg’s “year of efficiency” and the start of an AI infrastructure sprint
