• Meta is implementing significant cuts within its Reality Labs division, with some teams facing reductions of up to 30%, as part of a broader restructuring.
  • The company is shifting its top metaverse executive, Gabe Aul, to oversee AI products, signaling a major strategic re-prioritization.
  • CEO Mark Zuckerberg has designated 2025 as a "watershed" year for the metaverse, with its future viability hanging in the balance.

In a dramatic scaling back of its once-grand vision, Meta Platforms Inc. is preparing to slash spending on its metaverse efforts, with some teams within the Reality Labs division facing cuts of up to 30%, according to people familiar with the matter. The move comes as the social media giant aggressively pivots its resources and leadership toward artificial intelligence, a shift that casts serious doubt on the long-term future of its virtual world ambitions.

The restructuring is already underway. Recent layoffs have impacted Oculus Studios and the team behind the Supernatural VR fitness app, which Meta acquired for over $400 million. A company spokesperson confirmed that "some teams within Oculus Studios are undergoing shifts in structure and roles that have impacted team size," adding that the changes are aimed at working "more efficiently on the future mixed reality experiences." Subscribers to Supernatural will now see fewer weekly workouts available.

Perhaps the most telling sign of the strategic shift is the reassignment of key personnel. Gabe Aul, who was leading Meta's Horizon product efforts, has been moved to oversee AI products. He will retain responsibility for core metaverse work like avatars and content experiences, but his new primary focus is clear. Meanwhile, Ryan Cairns, who leads Quest hardware and the Meta OS, now reports directly to Chief Technology Officer Andrew Bosworth. This consolidation of reporting lines is seen internally as an effort to streamline a division that has burned through staggering sums of capital.

Since rebranding from Facebook in 2021, Meta has invested over $60 billion into Reality Labs. The returns have been elusive. Horizon Worlds, the flagship social platform, has been plagued by criticism over graphics quality and, more fundamentally, a lack of users, with its virtual plazas often described as empty. The contrast with the company's new priority is stark. On Meta's most recent earnings calls, the word "AI" was mentioned 23 times, compared to just seven references to the metaverse. The company now plans to invest $60 to $65 billion in AI infrastructure in 2025 alone—a sum that nearly equals the total historical investment in the metaverse.

Internally, 2025 is being framed as a make-or-break year. Andrew Bosworth, the Reality Labs chief and Meta's CTO, recently told staff that this year "likely determines whether this entire effort will go down as the work of visionaries or a legendary misadventure." The focus for the remaining metaverse teams is now on polishing existing mixed-reality products and, crucially, expanding Horizon Worlds to mobile and mixed-reality devices. Success on mobile is viewed by several people inside the company as essential for the project's survival.

The cuts and strategic pivot reflect growing pressure from investors concerned about the metaverse's continued drag on profitability. While Zuckerberg has personally championed the vision, the commercial reality has forced a recalculation. The company is now attempting to walk a fine line: maintaining enough of a metaverse presence to justify its corporate rebranding while funneling the vast majority of its capital and top talent toward the generative AI race, where it is competing directly with rivals like Google and OpenAI.

Meta did not immediately respond to a request for comment on the specific scale of the planned cuts. The coming months will test whether a pared-back metaverse operation can achieve the engagement that has so far cost tens of billions to pursue, or if these cuts are the first step toward a more permanent retreat.

Correction: An earlier version of this article misstated the total investment in AI infrastructure for 2025. The planned investment is $60 to $65 billion.