Meta confirms layoffs of over 1,000 people and closure of VR studio, shifting focus from Metaverse strategy to mobile features and AI wearables

Meta spokesperson Tracy Clayton confirmed that the company will be cutting more than 1,000 employees, or roughly 10% of its workforce, at its Reality Labs division, which develops mixed reality (XR) products. The company is shifting its Metaverse strategy from prioritizing immersive VR headsets to focusing on mobile devices, and the Meta Horizon team's resources will be redirected almost entirely to developing mobile experiences and AI tools.

Meta Begins Jobs Cuts After Shifting Focus From Metaverse to Phones - Bloomberg
https://www.bloomberg.com/news/articles/2026-01-13/meta-begins-jobs-cuts-after-shifting-focus-from-metaverse-to-phones

Meta confirms Reality Labs layoffs and shifts to invest more in wearables | The Verge
https://www.theverge.com/news/861295/meta-reality-labs-layoffs-shift-to-wearables

Reality Labs has lost more than $70 billion since the beginning of 2021, with many investments still not generating sufficient returns, and Meta has reportedly implemented large-scale layoffs to reduce its investments in VR to improve the sustainability of its business, slim down its organization, and implement a more focused roadmap.

Meta to lay off approximately 10% of its research and development department, Reality Labs, likely focusing on metaverse-related personnel - GIGAZINE

Clayton confirmed the layoffs in a Bloomberg report, saying the company is shifting some of its investments from the Metaverse to wearables. He explained that the job cuts are part of this effort, and that the company plans to reinvest the funds saved from the cuts to support the growth of its wearables products this year.

The Metaverse, an immersive VR experience that CEO Mark Zuckerberg envisioned when he changed the company name to Meta in 2021, has not been as popular as initially anticipated, and as a result, the company is shifting its Metaverse strategy from a VR-first approach to one that prioritizes mobile devices.

Meta drastically cuts its metaverse budget and shifts to AI wearable devices - GIGAZINE

The Horizon metaverse software development team will focus resources almost exclusively on mobile features to accelerate delivery of the best mobile experiences and AI creator tools.

Meanwhile, AI smart glasses such as Ray-Ban Meta and Oakley Meta have performed better than expected, with Meta considering doubling its annual production capacity of AI smart glasses to more than 20 million units by the end of 2026.

As part of these cuts, Meta will close several VR game and content development studios, including Armature, known for the VR version of Resident Evil 4 ; Sanzaru, which is working on Asgard's Wrath 2 ; and Twisted Pixel, which created Marvel's Deadpool VR . While VR fitness studio Supernatural will continue to support existing products, it will no longer develop new content or features.

However, five studios - Beat Games, BigBox, Camouflaj, Glassworks, and OURO - will remain in operation, so it appears that not all studios will be closed.

Oculus Studios director Tamara Shamana said the change in plans, including the job cuts, does not mean the company is retreating from video games, but rather that it will focus on investing in third-party developers and partners rather than in-house development to ensure the long-term sustainability of the gaming ecosystem.