- Meta may cut metaverse spending by up to 30%, with potential layoffs early next year.
- The VR division and Horizon Worlds are expected to absorb most of the reductions.
- Slow industry adoption and investor pressure pushed Meta to scale back its ambitions.
Meta’s stock jumped in early trading after reports surfaced that CEO Mark Zuckerberg is preparing to slash spending on metaverse projects by as much as 30% next year. According to Bloomberg, the proposed cuts would heavily impact Meta Horizon Worlds and the Quest VR division, both of which form the core of Meta’s metaverse push. Early chatter suggests layoffs could begin as soon as January, though final decisions aren’t fully locked in yet. The market reacted quickly, with META shares rising up to 6% before the opening bell.
VR Division Takes the Hardest Hit
Most of the reductions are expected to fall on Meta’s virtual reality group, which has been responsible for the bulk of metaverse-related expenses. Sources noted that the company had overestimated how quickly the broader tech industry would adopt virtual worlds and VR hardware. With less competition and slower user growth than expected, Meta is reportedly shifting its priorities and reallocating resources. Executives met last month at Zuckerberg’s Hawaii compound to map out the budget for 2026, where deeper cuts were discussed for the metaverse team.
Company-Wide Cuts But Metaverse Feels More Pressure
While Zuckerberg has asked nearly every division to shave off around 10% of spending for 2026, the metaverse unit has been told to dig much deeper this time around. The reasoning, according to insiders, is that Meta’s long-term bet on immersive digital worlds simply isn’t delivering returns at the pace investors hoped for. With rising pressure from shareholders and ongoing scrutiny from regulators—especially around child safety—Meta appears ready to scale back its most ambitious project to date.
Investor Concerns Grow as Meta Reevaluates Strategy
The massive metaverse effort has been under fire for years, criticized as a money sink that hasn’t produced meaningful adoption. Watchdogs have also raised concerns over privacy gaps and the safety of younger users inside virtual environments. The potential budget cuts signal a clear shift: Meta is no longer willing to pour unlimited capital into a sector that hasn’t met expectations. As the company enters its new budgeting cycle, it’s clear Zuckerberg is tightening the reins on what was once pitched as the future of the internet.
