Meta to cut roughly 10 percent of Reality Labs staff

Meta is preparing reductions of roughly 10 percent in its Reality Labs division as the social network giant redirects resources toward next-generation artificial intelligence and AI-related wearables. The cuts, people familiar with the plan said, are expected imminently and could be announced as soon as Tuesday, with hundreds of employees affected.

Reality Labs, the unit that designs VR headsets, metaverse software and AR wearables, employs about 15,000 people and represents roughly 19 percent of Meta’s global workforce of about 78,000. A 10 percent reduction would remove roughly 1,500 roles; one person briefed on the matter cautioned that the final number could exceed that level. Company spokespeople were contacted and declined to comment.

The reductions are expected to hit teams focused on VR hardware and Meta’s VR-based social network most heavily, while groups working on augmented-reality wearables will be largely spared. The AR group behind Meta’s Ray-Ban smart glasses, which include a camera and a personal AI assistant, is not expected to see major cuts; Meta has said those glasses have sold more than 2 million units. The move reflects a strategic pivot from an expensive metaverse bet toward technologies that leverage advances in generative AI and on-device intelligence.

Meta’s internal leadership has been preparing for a reallocation of resources. Andrew Bosworth, Meta’s chief technology officer and the executive overseeing Reality Labs, called an all-hands meeting for Wednesday and urged employees to attend in person, according to a memo circulated to the division. The meeting has been described internally as highly significant. Senior executives, including CEO Mark Zuckerberg, asked late last year that the company seek budget reductions within Reality Labs and identify projects that could be paused or wound down.

The shift follows years of steep losses at Reality Labs. The division has amassed cumulative losses estimated at more than $70 billion since its inception in 2020, and in the most recent quarter recorded roughly $4.4 billion in losses on $470 million in revenue. Those financial results have prompted scrutiny of the company’s long-term hardware investments and contributed to the decision to rebalance funding toward AI initiatives that management sees as closer to commercial scalability.

The cuts will have a regional impact. Reality Labs maintains a strong presence in the Seattle area, including offices in Redmond and Bellevue, and earlier rounds of job reductions and internal actions have already affected teams in Washington state. Local operations were previously cited by regulators for safety issues in a cleanroom at a Redmond facility, an episode that led to a temporary shutdown of that space in January 2024. Community and civic leaders in tech hubs where Reality Labs has sizable staffs will be watching for the scale and scope of local layoffs.

For Meta, the changes mark a reorientation of a multibillion-dollar bet on the metaverse into a narrower, AI-first posture that prioritizes software and on-device AI experiences. The company also announced broader leadership moves with Dina Powell McCormick named president and vice chair, signaling concurrent shifts in corporate governance as engineering priorities evolve. The immediate test will be how Meta balances short-term cost discipline with long-term hardware research that could shape the next generation of immersive and AI-enabled devices.