Meta Slashes Metaverse Budget by Up to 30 % as AI Becomes Priority

Meta is reportedly planning to cut as much as 30% of its budget for metaverse-related efforts in 2026. The move is part of an internal budget review led by Mark Zuckerberg, who has asked all departments to reduce spending, but asked the company’s virtual-reality/metaverse division to take deeper cuts.

This proposed reduction would hit projects under Reality Labs, the arm responsible for virtual-reality headsets and the social platform Horizon Worlds.

Executives expect that such a steep cut could trigger layoffs as soon as January, though the final decision is yet to be confirmed.

The news pushed Meta’s stock up by nearly 4–6% as markets reacted positively to the company’s move toward reining in costly, underperforming projects.

Meta had invested heavily in metaverse since rebranding from Facebook in 2021. The push into virtual worlds and mixed reality has cost the company tens of billions, but failed to take off at the scale the company expected.

Now, the shift suggests Meta is refocusing its resources toward artificial-intelligence efforts, and possibly AI-enabled hardware like smart glasses.

Investors appear relieved. What this means is that Meta is signaling a strategic pivot, from long-term VR/metaverse ambitions toward more immediate, potentially profitable AI initiatives.

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