Meta Plans Up to 30% Metaverse Budget Cuts in 2026

Meta Platforms is planning significant budget reductions of up to 30 percent for its metaverse division in 2026, a move that could lead to layoffs as early as January, according to people familiar with the company's internal discussions.

The proposed cuts, part of Meta's annual budget planning process, target the unit responsible for developing virtual reality products and experiences. This includes the Horizon Worlds social virtual reality platform and the Quest virtual reality headset business, which form the core of Meta's metaverse efforts. Executives discussed the reductions during a series of meetings last month at CEO Mark Zuckerberg's compound in Hawaii. While Zuckerberg has requested 10 percent cost savings across all departments, a standard ask in recent budget cycles, the metaverse group was directed to pursue deeper reductions due to slower-than-expected industry adoption of the technology.

The metaverse division operates within Meta's Reality Labs, the unit focused on augmented and virtual reality hardware and software. Since the start of 2021, Reality Labs has reported losses exceeding $70 billion, driven by heavy investments in research and development that have...