Meta reduces VR staff as AR and AI take priority

Meta is reportedly laying off 10% of employees in its Reality Labs division, the unit behind the company’s VR and metaverse projects, according to the New York Times. With roughly 15,000 staff in Reality Labs, this could impact over 1,000 people.

The cuts coincide with the planned shutdown of several VR studios, including Armature Studio, Twisted Pixel, and Sanzaru, as well as a technical unit called Oculus Studios Central Technology. A report notes that augmented reality (AR) teams won’t be affected, as Meta plans to redirect funds toward AR hardware like glasses and controllers.

The move reflects Meta’s broader pivot from the metaverse toward AI development, which has accelerated over the past year. Meta reorganized to create its Superintelligence Labs, hired AI talent from other labs, and recently moved metaverse head Vishal Shah to oversee AI products.

Why it matters: The layoffs signal a practical recalibration. VR hasn’t yet achieved the scale Meta hoped for, while AR and AI are emerging as the more promising long-term growth areas. By consolidating VR operations, Meta is freeing resources to invest in AI research and AR hardware.

Pros:

• More focus on high-potential areas like AR and AI.

• Resources from VR consolidation can accelerate product development.

Cons:

• Significant layoffs for VR teams and shutdown of creative studios.

• Could slow VR content innovation in the short term.

Industry impact: Meta’s move highlights a broader trend in tech: the shift from experimental, capital-intensive metaverse projects to areas with clearer near-term returns, like AI and AR. Other companies in XR may reevaluate their own VR bets, while AI competition heats up as top talent is poached to fuel next-generation products.