Meta's Layoffs Has Tech Asking, "There Were Still People Working On The Metaverse?!"

Layoffs at big tech companies are no longer shocking or even surprising. The only thing about this announcement from Meta, aka Facebook, that took the tech industry by surprise was that the company still employed so many people working on the metaverse, a concept that had clearly failed as long as two years ago. 

That the company has now gone all in on AI is considered a worrisome harbinger for the future of that technology. JL

Meghan Bobrowsky reports in the Wall Street Journal:

Meta  laid off 10% of staff,1,500 people, from its virtual and augmented reality efforts - the metaverse - an area CEO Mark Zuckerberg once called the future of the company. He is trimming the metaverse group now because the technology hasn’t gained traction. A year after the name change and pivot, the company’s flagship metaverse product was failing to catch on. It had less than 200,000 monthly active users and most so-called “worlds” were never visited by anyone. The company’s presentations attempting to stoke enthusiasm for the Metaverse provided fodder for popular mocking internet memes. In January 2025, he told investors it would be a “pivotal” year for the metaverse and that long-term investments it had made would “really start to land.” Since then, the company has shifted focus to AI. 

Meta Platforms META -0.09%decrease; red down pointing triangle has laid off roughly 10% of staff, about 1,500 people, from its Reality Labs division, the unit that houses its virtual and augmented reality efforts, according to a person familiar with the matter.

In December, The Wall Street Journal reported that Meta was planning to make budget cuts to the teams working on what it calls the metaverse, an area that Meta Chief Executive Mark Zuckerberg once called the future of the company, and shift some spending over to development of AI glasses. 

“We said last month that we were shifting some of our investment from Metaverse toward Wearables,” a Meta spokesman said. “This is part of that effort.”

Zuckerberg is focused on trimming the metaverse group now because the technology hasn’t gained the traction the company had anticipated, the Journal previously reported.

After 17 years operating as Facebook, Meta changed its name in 2021 in a bet-the-company move ushering in what it promised was a new wave of online connectivity called the metaverse.

A year after the name change and pivot, the Journal reported that the company’s flagship metaverse product, called Horizon Worlds, was failing to catch on with users. It had less than 200,000 monthly active users and most so-called “worlds” were never visited by anyone at all. The company’s presentations attempting to stoke enthusiasm for Horizon Worlds provided fodder for popular mocking internet memes.

Since then, Meta has gradually shifted focus away from the metaverse and toward the tech industry’s new obsession: artificial intelligence. 

Meta has been ramping up spending on AI, pushing its capital expenditures up to $72 billion last year with plans to accelerate that spending this year. It has also doled out offers worth tens and hundreds of millions of dollars to AI researchers and engineers, and recently acquired a Singapore-based AI startup called Manus for more than $2 billion.

The company’s Ray-Ban smartglasses, equipped with AI, have also started to take off. The company has sold more than 2 million pairs, and has delayed the rollout of its newest glasses in Europe as it struggled to keep up with demand in the U.S.

Though most of Zuckerberg’s public remarks over the past year have been about AI, he also insisted a few times that the metaverse bet could still pay off. In January 2025, he told investors that it would be a “pivotal” year for the metaverse and that the company’s long-term investments had been making would “really start to land.”