Meta, which operates social networks Instagram and Facebook, has been rethinking its investments after a group of its products failed to deliver profitable results over the past few years.
Meta’s Reality Labs division produces virtual reality headsets and augmented reality smart glasses, supporting the company’s overall Metaverse philosophy. The division has incurred losses of about $73 billion through 2021.
In the third quarter of 2025 alone, Reality Labs suffered a $4.43 billion loss from operations, according to Meta’s latest earnings report.
Recent data from market research firm IDC, obtained by The Register, revealed that Meta shipped just 1.7 million Quest virtual reality headsets in the first three quarters of 2025, a 16% drop from the same period in 2024.
“All these ideas that AR (augmented reality) and VR (virtual reality) will replace the smartphone have not happened,” Francisco Geronimo, vice president of data and analytics at IDC, said in a statement to The Register. “It will never happen.”
The losses come after Meta invested billions of dollars in its Metaverse concept (a 3D virtual world where people socialize, shop, play, etc.) amid innovations in virtual reality technology; However, consumer interest in the Metaverse has waned in recent years.
According to Google Trends data, “metaverse” is a search term that reached its peak between late 2021 and early 2022 and has since declined in popularity.
A survey conducted by YouGov in February last year found that in 2024 most Americans will not be using Metaverse.
only 26% Over the past 12 months, Americans have used the Metaverse.
approx 1 in 10 Americans have said No brand presence They will be lured into the metaverse.
Also, 29% Non-Metaverse users said they would be more willing to join if Equipment costs were low.
Also, 23% More metaverse activities or experiences that interest them push them to join.
in comparison, 22% said Strong security and privacy protection can be a decisive factor and 19% Would be more interested if they could use the metaverse without A VR headset. Source: YouGov
Meta lost billions of dollars from its Reality Labs division.Colin Michaels Shutterstock” loading=”eager” height=”540″ width=”960″ class=”yf-lglytj loader”/>
Meta has lost billions of dollars from its Reality Labs division.Colin Michaels Shutterstock
As Meta faces declining Metaverse consumer demand, it has decided to lay off more than 1,000 employees at its Reality Labs division, according to a recent report from Bloomberg.
The division currently has about 15,000 employees, so the layoffs will shrink the team by 10%. The job cuts come as Meta CEO Mark Zuckerberg and other company executives began cutting potential budget cuts of up to 30% for the company’s Metaverse business last month.
“Starting today, VR will operate as a leaner, flatter organization with a more focused road map to maximize long-term sustainability,” Meta Chief Technology Officer Andrew Bosworth wrote in an internal staff memo obtained by Bloomberg.
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He also said that Meta will continue to develop Metaverse, but will focus more on bringing artificial intelligence creator tools to mobile devices rather than intensively developing virtual reality headsets. The company will continue to develop virtual reality headsets, but at a slower pace.
The intensified focus on AI comes at a time when Meta and EssilorLuxottica SA are in talks to double production of AI Ray-Ban smart glasses to 20 million units by the end of this year.
In addition to the layoffs, a separate internal memo reviewed by Bloomberg revealed that Meta is closing three of its in-house virtual reality game and content studios. These include Sanzaru, Armature and Twisted Pixel.
Additional labor:
Also, Supernatural, Meta’s virtual reality fitness studio, will cease development of new content and features, but will continue as a supported product.
“These changes don’t mean we’re moving away from video games,” Oculus Studios director Tamara Ciamanna wrote in an internal memo. “Gaming has become the cornerstone of our ecosystem. With this change we are shifting our investment to focus on our third-party developers and partners to ensure long-term sustainability.”
The layoffs at Meta come after the company reduced its workforce by about 5% last year through job cuts aimed at shedding underperforming employees.
Many companies across the country have followed in Meta’s footsteps in 2025, and they plan to continue the workforce trend this year, with AI playing a significant role in job cuts, according to a recent survey by Resume.org.
In 2025, many American companies Increase your investment in AIwith 27% reporting significant growth and 41% Noting a slight increase.
Economic Uncertainty, Trade Policy and AI Adoption Top reasons To be laid in 2025.
approx is at 10 Companies are possible Fire the employees In 2026.
Also, 37% expect Switch roles with AI By the end of this year. Source: Resume.org
“AI adoption is going to reshape the job market more dramatically over the next 18 to 24 months than we’ve seen in decades,” Cara Dennison, head of career advising at Resume.org, said in a statement.
“We will see continued displacement of routine and process-driven roles as well as entirely new categories of work focused on AI oversight, data ethics, prompt engineering, and human-AI collaboration,” she continued.
Related: Dell issues firm warning after employees violate work policy
This story was originally published by TheStreet on January 14, 2026, where it first appeared in the Jobs section. Add TheStreet as a preferred source by clicking here.
