Meta is making another significant shift in its long-term hardware strategy. A December report stated that the company was preparing deep cuts for its Metaverse division . Those predictions materialized this week with the layoff of approximately 1,500 employees within Meta’s Reality Labs division to focus on smart glasses. This figure represents about 10% of that team’s workforce. The move comes after a period that saw the division accumulate over $70 billion in losses.
Everything indicates that Meta is stepping away from its expensive obsession with the “metaverse.” Now, the company is focusing on the growing demand for AI-powered wearables.
Meta is firing 1,500 Reality Labs employees to save its AI hardware future
For years, Reality Labs has been the financial underdog of Mark Zuckerberg’s empire. The staggering figure of over $70 billion in losses comes from a cumulative total since 2021. That year, the company famously rebranded to Meta to highlight its commitment to a virtual future. However, that vision has struggled to find a mainstream audience.
The latest cuts specifically target the teams behind Horizon Worlds, Meta’s VR-based social network, and third-party development for Horizon OS. This restructuring suggests that the firm is adopting a “leaner” approach to virtual reality. It’s noteworthy that Meta isn’t killing off its Quest headsets entirely. However, the focus is definitely shifting. Instead of a VR-first social platform, Meta plans to integrate its metaverse ambitions more closely with mobile devices and existing apps.
The rise of smart glasses
The real winner in this internal shakeup is the wearables department. While VR headsets have remained a niche product, Meta’s collaboration with Ray-Ban has turned into a surprising success story. The AI-powered smart glasses have captured the public’s attention in a way the metaverse never quite did.
Meta plans to reinvest the savings of cutting costs in the VR division into expanding its smart glasses lineup. Reports indicate the company aims to double its production capacity for these AI wearables by the end of 2026. This transition seems to be in line with a growing industry trend in favor of “augmented” reality tools. These types of products are having a better reception than fully immersive, bulky headsets.
A mobile-first future
In a memo to staff, CTO Andrew Bosworth explained that the company is moving resources toward platforms with the fastest growth rates. For Meta, that means mobile. Change pursues the holy grail of all big tech companies: long-term sustainability.
For users, this likely means fewer experimental VR projects. You’ll probably also notice a much heavier emphasis on glasses that look like traditional eyewear but come packed with AI assistants and cameras.
