Meta could axe up to one-third of its ‘metaverse’ budget next year | The VergeSkip to main contentThe homepageThe VergeThe Verge logo.The VergeThe Verge logo.TechReviewsScienceEntertainmentAIHamburger Navigation ButtonThe homepageThe VergeThe Verge logo.Hamburger Navigation ButtonNavigation DrawerThe VergeThe Verge logo.Login / Sign UpcloseCloseSearchTechExpandAmazonAppleFacebookGoogleMicrosoftSamsungBusinessCreatorsMobilePolicySecurityTransportationReviewsExpandLaptopsPhonesHeadphonesTabletsSmart HomeSmartwatchesSpeakersDronesScienceExpandSpaceEnergyEnvironmentHealthEntertainmentExpandGamesTV ShowsMoviesAudioAIVerge ShoppingExpandBuying GuidesDealsGift GuidesSee All ShoppingCarsExpandElectric CarsAutonomous CarsRide-sharingScootersOther TransportationFeaturesVideosExpandYouTubeTikTokInstagramPodcastsExpandDecoderThe VergecastVersion HistoryNewslettersExpandThe Verge DailyInstallerVerge DealsNotepadOptimizerRegulatorThe StepbackArchivesStoreSubscribeFacebookThreadsInstagramYoutubeRSSThe VergeThe Verge logo.Meta could axe up to one-third of its ‘metaverse’ budget next yearComments DrawerCommentsLoading commentsGetting the conversation ready...NewsCloseNewsPosts from this topic will be added to your daily email digest and your homepage feed.FollowFollowSee All NewsAICloseAIPosts from this topic will be added to your daily email digest and your homepage feed.FollowFollowSee All AITechCloseTechPosts from this topic will be added to your daily email digest and your homepage feed.FollowFollowSee All TechMeta could axe up to one-third of its ‘metaverse’ budget next yearThe budget cuts aren’t yet finalized, but they could impact the team that works on Meta’s Quest headsets and Horizon Worlds, Bloomberg reports.The budget cuts aren’t yet finalized, but they could impact the team that works on Meta’s Quest headsets and Horizon Worlds, Bloomberg reports.by Emma RothCloseEmma RothNews WriterPosts from this author will be added to your daily email digest and your homepage feed.FollowFollowSee All by Emma RothDec 4, 2025, 3:39 PM UTCLinkShareImage: Cath Virginia / The VergeEmma RothCloseEmma RothPosts from this author will be added to your daily email digest and your homepage feed.FollowFollowSee All by Emma Roth is a news writer who covers the streaming wars, consumer tech, crypto, social media, and much more. Previously, she was a writer and editor at MUO.Meta may slash its budget for metaverse projects by up to 30 percent next year, according to a report from Bloomberg. Sources tell the outlet the potential cuts haven’t been finalized, but they would impact the unit that works on Meta’s Quest virtual reality headsets, along with its social platform Horizon Worlds.Meta, which changed its name from Facebook to align itself with the metaverse, has poured billions into building out its vision for virtual worlds over the past few years. But CEO Mark Zuckerberg has since shifted the company’s focus to developing AI superintelligence with a series of high-profile hires. It most recently added former Apple UI designer Alan Dye to its team, who will oversee the design of “hardware, software and AI integration for its interfaces.”RelatedMeta is playing the AI game with house moneyMeta wants its metaverse everywhereZuckerberg asked Meta executives to “look for 10% cuts across the board” as part of its annual budget planning process, according to Bloomberg. However, the outlet reports that Zuckerberg asked the metaverse division, which exists within Meta’s Reality Labs, to slash expenses even more, “given that Meta has not seen the level of industry-wide competition over the technology that it once expected.” As part of the potential cuts, Meta could reportedly begin laying off metaverse staff as early as January.Reality Labs has lost over $70 billion since the beginning of 2021, Bloomberg reports, with Meta’s most recent earnings report revealing that the division continues to bleed cash.Follow topics and authors from this story to see more like this in your personalized homepage feed and to receive email updates.Emma RothCloseEmma RothNews WriterPosts from this author will be added to your daily email digest and your homepage feed.FollowFollowSee All by Emma RothAICloseAIPosts from this topic will be added to your daily email digest and your homepage feed.FollowFollowSee All AIMetaCloseMetaPosts from this topic will be added to your daily email digest and your homepage feed.FollowFollowSee All MetaNewsCloseNewsPosts from this topic will be added to your daily email digest and your homepage feed.FollowFollowSee All NewsTechCloseTechPosts from this topic will be added to your daily email digest and your homepage feed.FollowFollowSee All TechVirtual RealityCloseVirtual RealityPosts from this topic will be added to your daily email digest and your homepage feed.FollowFollowSee All Virtual RealityMost PopularMost PopularCrucial is shutting down — because Micron wants to sell its RAM and SSDs to AI companies insteadSteam Machine today, Steam Phones tomorrowApple’s head of UI design is leaving for MetaAntigravity’s 360-degree drone is here to help you forget DJIElon Musk is on a racist posting spree againThe Verge DailyA free daily digest of the news that matters most.Email (required)Sign UpBy submitting your email, you agree to our Terms and Privacy Notice. This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.Advertiser Content FromThis is the title for the native adMore in NewsRussia bans Roblox over ‘LGBT propaganda’ and ‘extremist’ contentNvidia’s new RTX 50-series GPU driver restores PhysX support for popular gamesThe EU is probing Meta over WhatsApp’s AI chatbot restrictionsApple removed a Night mode photo feature from the iPhone 17 ProAntigravity’s 360-degree drone is here to help you forget DJISatellites keep photobombing the Hubble telescope, and it’s getting worseRussia bans Roblox over ‘LGBT propaganda’ and ‘extremist’ contentEmma RothAn hour agoNvidia’s new RTX 50-series GPU driver restores PhysX support for popular gamesTom WarrenTwo hours agoThe EU is probing Meta over WhatsApp’s AI chatbot restrictionsJess Weatherbed12:39 PM UTCApple removed a Night mode photo feature from the iPhone 17 ProJess Weatherbed11:29 AM UTCAntigravity’s 360-degree drone is here to help you forget DJISean Hollister12:59 AM UTCSatellites keep photobombing the Hubble telescope, and it’s getting worseJustine CalmaDec 3Advertiser Content FromThis is the title for the native adTop Stories12:00 PM UTCThe future of country music is here, and it’s AIAn hour agoAnthropic’s quest to study the negative effects of AI is under pressureVideoDec 3One day, AI might be better than you at surfing the web. That day isn’t today.Dec 3Crucial is shutting down — because Micron wants to sell its RAM and SSDs to AI companies insteadDec 3BMW iX3 first drive: a ‘New Class’ is in sessionDec 3The ugly Pebble 2 Duo is the smartwatch for meThe VergeThe Verge logo.FacebookThreadsInstagramYoutubeRSSContactTip UsCommunity GuidelinesArchivesAboutEthics StatementHow We Rate and Review ProductsCookie SettingsTerms of UsePrivacy NoticeCookie PolicyLicensing FAQAccessibilityPlatform Status© 2025 Vox Media, LLC. All Rights Reserved

Meta is undertaking a significant shift in its strategic priorities, evidenced by a potential reduction of up to 30% in its ‘metaverse’ budget for the upcoming year. This news, reported by Bloomberg, stems from a broader company-wide effort to streamline operations and refocus investment, primarily towards artificial intelligence (AI) development. The decision isn’t a sudden, drastic overhaul, but rather a calculated recalibration following several years of heavy investment in the metaverse, largely spearheaded by CEO Mark Zuckerberg.

The core of this adjustment lies within Meta’s Reality Labs division, which has incurred over $70 billion in losses since early 2021. Recent earnings reports continue to demonstrate the division’s ongoing cash burn, indicating that the initial expectations of rapid metaverse adoption and industry-wide competition haven’t materialized. This has prompted a change in direction, driven by Zuckerberg’s focus on AI superintelligence, a technology increasingly viewed as a more promising avenue for future growth and innovation.

As part of this recalibration, Meta has been instructed to undertake “10% cuts across the board,” with the metaverse division receiving a more significant reduction – potentially up to 30%. This is largely attributed to the shifting landscape of the tech industry, where attention and investment are rapidly consolidating around AI. Zuckerberg’s directive reflects a recognition that the metaverse has not yet reached the level of competition he initially anticipated.

The potential cuts will directly impact the team responsible for Meta’s Quest virtual reality headsets and its social platform, Horizon Worlds. There is a possibility of staff layoffs occurring as early as January, reflecting a cost-saving measure. Meta is actively pursuing a more targeted and efficient investment strategy, prioritizing resources for AI integration, hardware, software, and user interface design, as signaled by the recent hire of Alan Dye, a former Apple UI designer, to oversee these efforts.

This shift isn’t necessarily an abandonment of the metaverse entirely but rather a strategic realignment of resources. Meta is attempting to mitigate previous over-investment and align its efforts with what is now considered a dominant trend in the tech industry. The financial pressures within Reality Labs highlight the challenges many companies face as they navigate a rapidly evolving technological landscape and the need to demonstrate tangible returns on substantial investments. The focus now centers on leveraging AI to potentially revitalize the metaverse, rather than continuing to expand its reach without a clear competitive advantage.