As part of a major strategic shift under CEO Mark Zuckerberg, Meta Platforms is preparing to significantly reduce funding for its metaverse division in 2026, Bloomberg is reporting.
According to sources familiar with internal discussions, the company might cut the metaverse budget by as much as 30%. This potential reduction comes as a surprise given that the rebranded company formerly known as Facebook had once bet heavily on the metaverse as its future.
The anticipated cuts are expected to impact the division responsible for the virtual reality platform Horizon Worlds and the VR hardware business Meta Quest (formerly Oculus). If implemented, the budget trimming would likely lead to layoffs beginning in January, as part of the broader 2026 budgeting process.
Investors reacted quickly to the news. Shares of Meta climbed roughly four to six percent after the announcement, reflecting optimism that cutting spending on loss-making metaverse ventures could help improve the company’s financial health.
The push for deeper cuts in the metaverse group comes as part of a wider company-wide cost-saving exercise. According to insiders, Zuckerberg asked executives to target ten percent cuts across all divisions, but demanded more significant reductions from Reality Labs, the metaverse-focused arm of Meta.
Meta’s substantial investment in augmented and virtual reality has raised eyebrows among analysts and investors. Since 2020, the company has reportedly spent over sixty billion dollars on its metaverse ambitions. Reality Labs, the division behind the metaverse push, has lost more than seventy billion dollars since 2021, according to recent reports.
This change marks a stark departure from the company’s 2021 rebranding, when Zuckerberg publicly declared the metaverse as the next frontier for human connection. That vision had driven ambitious investments and major structural changes at the time.
At the same time, Meta appears to be refocusing its long-term strategy toward AI and smart hardware. Recent moves indicate a pivot toward AI-driven offerings and wearable devices such as augmented reality glasses rather than immersive virtual worlds.
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