Meta eyes 10%–15% Reality Labs job cuts as losses top $70bn

Meta is preparing to cut jobs in its Reality Labs division as the company reassesses its long-running bet on virtual and augmented reality ahead of a key internal meeting this week.

Business Insider reported that Meta is planning layoffs in Reality Labs, citing three people familiar with the matter. The cuts are expected to affect teams working on virtual reality headsets and Horizon Worlds, Meta’s VR-based social platform.

The New York Times separately reported that roughly 10% to 15% of Reality Labs’ workforce, estimated at around 15,000 employees, could be impacted, with an announcement expected this week. Meta declined to comment on the reports.

The move comes as Andrew Bosworth, Meta’s chief technology officer and head of Reality Labs, has called a division-wide meeting for Wednesday, describing it internally as the “most important” meeting of the year. Business Insider previously reported that employees were urged to attend the meeting in person.

Mounting losses and strategic pressure

Reality Labs has been one of Meta’s most expensive bets. According to figures previously disclosed by the company and reported by Reuters, the division has accumulated more than $70 billion in operating losses since 2020, as Meta invested heavily in virtual reality hardware, software and long-term metaverse development.

The unit has faced repeated rounds of restructuring as Meta has increasingly shifted focus and capital towards artificial intelligence, an area chief executive Mark Zuckerberg has described as central to the company’s future growth.

The Wall Street Journal has reported in recent months that Meta is prioritising AI infrastructure and products across its core advertising and consumer platforms, even as it continues to publicly back its metaverse ambitions.

A pivotal year for Reality Labs

Internal communications underscore the pressure facing the division. In a memo obtained by Business Insider last year, Bosworth described 2025 as the most critical year of his tenure, warning that the outcome would determine whether Reality Labs is ultimately seen as visionary or as “a legendary misadventure”.

That framing has added urgency to the current restructuring, particularly as investor scrutiny has intensified. Bloomberg has reported that heavy spending on AI and long-term technologies has unsettled markets at times, contributing to volatility in Meta’s valuation.

Employees told Business Insider that teams supporting VR hardware and Horizon Worlds are likely to be disproportionately affected, reflecting a sharper focus on cost control and near-term priorities.

The planned layoffs would add to a series of workforce reductions across Meta in recent years. The company has repeatedly described 2023 and 2024 as years of “efficiency”, trimming headcount while redirecting resources towards areas with clearer commercial potential.

While Meta continues to position Reality Labs as a long-term strategic investment, the latest cuts suggest a more disciplined approach as leadership weighs results against ambition.

What comes next

With the division-wide meeting imminent, employees and investors alike are watching closely for signals on how Meta intends to balance its metaverse vision with financial discipline.

As 2025 approaches, Reality Labs appears to be entering a decisive phase—one that will test whether Meta’s costly experiment in immersive technology can still justify its scale and investment.

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