On January 14, 2026, Meta Platforms initiated a significant strategic shift away from its “metaverse-first” approach, disclosing the layoff of over 1,000 employees in its Reality Labs division.
This reduction accounts for approximately 10% of the division’s total workforce of 15,000.
“This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year,” a spokesperson for the company stated to Bloomberg.
“Last month, we indicated that we were reallocating some of our investment from the metaverse to wearables,” they added.
As a result, the owner of Facebook is scaling back its initiatives on Virtual Reality (VR) and its “metaverse-first” vision, which gained significant attention during the pandemic and prompted the company’s rebranding to Meta in October 2021. Since then, Reality Labs has incurred losses exceeding $70 billion.
The recent layoffs indicate a clear shift in focus toward AI-driven wearables and mobile integration.
Meta aims to enhance its “sustainability” by redirecting its metaverse efforts toward mobile devices and reducing its virtual reality investments, as noted in an internal memo from CTO Andrew Bosworth that was reviewed by Bloomberg.
This restructuring has severely impacted Meta’s gaming aspirations, leading to the immediate closure of several VR game studios, including Armature, Sanzaru, and Twisted Pixel. While the VR fitness app Supernatural will continue to operate, the development of new content and features will be paused.
Tamara Sciamanna, the director of Oculus Studios, reassured the team that gaming remains a central focus for Meta.
“Gaming stays at the heart of our ecosystem. With this change, we are reallocating our investment to prioritize our third-party developers and partners for long-term sustainability,” she allegedly stated in an internal memo.
The Reality Labs division has previously encountered smaller-scale layoffs; in April 2025, the company let go of employees working on the VR fitness game Supernatural, without disclosing specific numbers.
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