Meta plans to cut about 10 percent of the employees in its Reality Labs division, which works on products including the metaverse, according to three people with knowledge of the discussions, as the company shifts priorities to build next-generation artificial intelligence.
The cuts to Reality Labs, which has roughly 15,000 employees, could be announced as early as Tuesday.
The layoffs would be a fraction of Meta’s total workforce of 78,000, but are set to disproportionately affect those in the metaverse unit who work on virtual reality headsets and a V.R.-based social network, said the people, who asked not to be named since they were not authorized to discuss confidential decisions.
The cuts could affect more than 10 percent of the division, one person said.
Andrew Bosworth, Meta’s chief technology officer who oversees Reality Labs, has called a meeting for Wednesday and urged staff to attend in person, according to a memo sent to employees last week and obtained by The New York Times.
Mr. Bosworth said the meeting was the “most important” of the year, but did not elaborate.
Mark Zuckerberg, Meta’s chief executive, asked top executives last year to cut their 2026 budgets while he poured money into A.I. research. As Meta faces competition from companies like OpenAI and Google, Mr. Zuckerberg has increased the budget for TBD Lab, the skunk works unit at Meta that aims to build superintelligence, a godlike A.I. system.
The company also plans to reallocate funds from virtual reality products to increase the budget for its wearables division, which develops smart glasses and wristband computing devices.
The layoffs are set to slow the pace of building virtual reality for the metaverse, Mr. Zuckerberg’s ambitious vision of what social networking could look like in a V.R.-based version of the internet.
He has pursued that vision since 2014, when he acquired Oculus, a virtual reality startup that became the foundation of Meta’s hardware division. In 2021, Mr. Zuckerberg rebranded the company as Meta, officially moving away from the Facebook name.
Meta’s layoffs this week are set to disproportionately affect those in the metaverse unit who work on virtual reality headsets and a V.R.-based social network
But consumers have not flocked to buy Meta’s virtual reality headsets, even as the company has spent tens of billions of dollars building them.
At the same time, investors have grown wary of Meta’s spending as it has ratcheted up its work on artificial intelligence. The company expects to invest tens of billions of dollars in data centers, the computing facilities that power A.I. development, and it has handed out lavish pay packages to hire top A.I. researchers.
Meta declined to comment. In December, a company spokeswoman said Meta was “shifting some of our investment from Metaverse toward A.I. glasses,” and was not planning “any broader changes.”
Business Insider earlier reported Mr. Bosworth’s memo.
On Monday, Meta also announced that it had hired Dina Powell McCormick, a former adviser to President Trump and a banker at Goldman Sachs, to serve as its new president and vice chairman, focusing on data center banking deals. Ms. Powell McCormick served on Meta’s board of directors for eight months last year. The company also unveiled a project called Meta Compute, which Mr. Zuckerberg said would create data centers powered by “tens of gigawatts this decade, and hundreds of gigawatts or more over time.”
Even as the A.I. race has ramped up, Meta has said it is not giving up on the metaverse. But the Silicon Valley company appears to be redefining exactly what that might look like.
The Reality Labs division, which develops augmented reality hardware such as glasses and wristbands that enable voice- and gesture-based interaction with computing menus and commands, is expected to be largely spared from the cuts, two people said.
That division is responsible for Meta’s Ray-Ban sunglasses, which incorporate a camera and a personal AI assistant. The glasses have been a surprise hit, selling more than two million units over the past few years, the company has said.
Customers trying on Meta glasses exhibited inside the Meta Lab pop-up store in New York City last year
The augmented reality division is also responsible for the Ray-Ban Display smart glasses, which have a digital menu inside the lenses that can be navigated with a hardware wristband. At an industry event in Las Vegas last week, Meta said it was delaying the international rollout of the Display glasses, citing limited inventory and “unprecedented demand.”
