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Meta changed Its name for the metaverse - now cutting 30% of It
Remember when Facebook changed its name to Meta to signal its big bet on the metaverse? After the hype of 2021, the promise of a technological "revolution" lost momentum, and enthusiasm gave way to skepticism about the idea of migrating life to a virtual environment. Now, those who fueled the boom are backing down: Meta is preparing cuts of up to 30% in its initiatives related to the metaverse.
According to Bloomberg, Facebook's parent company – which once treated the metaverse as the company's future – has decided to significantly reduce the area's budget next year. The cut affects projects such as the Horizon Worlds virtual world and the Quest virtual reality division.
Sources interviewed for the report say that a reduction of this magnitude could include layoffs as early as January 2026, although there is no final decision yet.
The cuts are part of Meta's budget planning for 2026. In meetings held last month, Mark Zuckerberg reportedly instructed executives to seek 10% reductions across all areas – a request that, according to Bloomberg sources, has been repeated in similar budget cycles in recent years.
"The metaverse area has been asked to make deeper cuts this year, as Meta has not seen the level of competition for the technology in the industry that it expected," Bloomberg wrote, citing people familiar with the matter.
Reuters reported that Meta's augmented reality unit has already burned through more than $60 billion since 2020.
While reducing its bet on the metaverse, the company is accelerating investments in artificial intelligence, developing models, chatbots, and a range of products, including Meta's Ray-Ban smart glasses. In 2025, the company launched the Superintelligence Lab after investing $14.3 billion to acquire 49% of Scale AI. As part of the agreement, Alexandr Wang, founder and CEO of the startup, left his position at Scale to lead Meta's new lab, dedicated to advanced AI initiatives.
Meta is expected to further reduce its investments in building the metaverse, according to a Bloomberg report published on Thursday (4). Sources close to the matter say that the budget planned for 2026 includes cuts of up to 30% in projects linked to the initiative.
Part of this reduction is expected to manifest itself in layoffs. According to the report, the first layoffs could occur as early as January, especially affecting teams involved in virtual reality and augmented reality work. Meta, however, did not comment on the matter.
A large part of the projects related to the metaverse is the responsibility of the Meta Reality Labs division, which takes care of both the Quest virtual reality glasses and the Ray-Ban smartglasses. This was the area that concentrated the company's biggest bet when the metaverse gained momentum in 2021 — to the point of justifying the change of the name Facebook to Meta.
Since then, however, the topic has lost relevance in the media and the market. The initiative has started to register losses in the billions, while the company has turned its attention to research and development in artificial intelligence, now present in virtually the entire Meta ecosystem.
Although the original report doesn't mention changes to the release schedule, it's possible that the reduction will impact plans related to Meta Quest 4. Since 2024, there have been rumors that the new line would be released in different versions.
According to Bloomberg, the prospect of a slowdown in metaverse investments was well received by investors: Meta's shares rose about 4% after the announcement of the possible strategic change.








