Meta Cuts 1,000 VR Jobs After $70 Billion Loss, Focuses on AI

- Meta scales back VR ambitions after over $70 billion in losses since 2020. - The company shifts focus to AI and wearable tech, including its Ray-Ban Meta smart glasses. On January 14, 2026, multiple outlets reported a major strategic shift at Meta. The company is significantly reducing its investment in virtual reality after its Reality Labs division suffered years of financial losses. As a result of this shift, Meta is redirecting resources to artificial intelligence (AI) and wearable technology. Meta’s VR division, Reality Labs, has posted over $70 billion in cumulative losses since 2020. In the last quarter of 2025 alone, it lost $4.4 billion on $470 million in revenue. In response, Meta laid off more than 1,000 employees from the division. The company also shuttered several VR game studios, including Armature Studio, Twisted Pixel, and Sanzaru. In addition, it placed its VR fitness app, Supernatural, in maintenance mode and halted plans for new features. These cutbacks mark a departure from the metaverse-driven ambitions that led CEO Mark Zuckerberg to rebrand Facebook as Meta in 2021. The company is now refocusing on AI and wearable technologies. Consequently, Meta is prioritizing the development of its Ray-Ban Meta smart glasses and has increased its capital spending projection to between $70 billion and $72 billion for 2025, with further increases anticipated for 2026. To lead this new direction, Meta appointed Alexandr Wang, founder of Scale AI, to oversee its AI strategy, while Vishal Shah, previously a key figure in Meta’s metaverse efforts, now serves as vice president of AI products. Despite scaling back its VR efforts, Meta has not entirely abandoned the space. The company is working to attract developers from platforms like Roblox to create content for its Horizon Worlds platform. To broaden its appeal, Meta is now positioning Horizon Worlds as a mobile application. Meta’s restructuring signals a significant departure from its metaverse-focused vision, as the company is now pursuing a diversified strategy centered on scalable AI and wearable technology. Closing key VR initiatives and reallocating resources emphasizes this pivot toward long-term growth beyond virtual reality.