Meta Plans Deep Cuts to Metaverse Spending as Shares Rise on Shift Toward AI

Meta Platforms ($META) is preparing budget cuts of up to 30% for its metaverse division in 2026, a shift that follows years of heavy spending and ongoing financial losses within Reality Labs. Following the announcement, Meta’s premarket share price rose more than 4%. The company continues significant lobbying activity as well .

• Executives discussed cuts as high as 30% for the metaverse group, including Horizon Worlds and Quest VR.
• Larger reductions are being considered due to lower-than-expected industry momentum for metaverse technologies.
• Cuts could include layoffs as early as January; decisions are not yet finalized.
• The changes are part of Meta’s 2026 planning cycle, following internal meetings in Hawaii.
• Reality Labs has lost more than $70 billion since 2021; analysts have urged Meta to reduce or exit metaverse investments.
• Meta has shifted public focus toward AI models, Meta AI, Llama, and related hardware such as Ray-Ban smart glasses.
• Meta has spent nearly $20 million on lobbying year-to-date.

Relevant Companies

• Meta Platforms ($META) — Potential impact from cost reductions, restructuring decisions, and reallocation of investment toward AI and hardware.

Editor’s Note: This is a developing story. This article may be updated as more details become available.