Meta Layoffs 2026: VR Reality Labs Hit by 10% Job Cuts

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Meta to cut around 1,500 jobs in its Reality Labs division.

Meta to Cut 10% Jobs in its VR Team

Reality Labs has a team of approximately 15,000 people at Meta, so a 10% cut would mean roughly 1,500 members could lose their jobs. 

The announcement is expected this week, according to The New York Times. Meta’s CTO, Andrew Bosworth, has actually called everyone in that division together for what he’s been calling the “most important meeting of the year”. He is asking members to show up in person.

Update: Meta spokesperson Tracy Clayton has confirmed the layoffs.

"We said last month that we were shifting some of our investment from Metaverse toward Wearables. This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year."

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This is the first major tech layoff of 2026. Last year, around 245,000 tech jobs were cut globally. About 70% of these were from the US only. While it looks like the job market will stablize in 2026, job cuts from a tech giant at the beginning of the year are not good news.

Reality Labs, the division responsible for Meta’s Quest VR headsets and the metaverse, has become one of tech’s most expensive experiments. 

But looks like the experiment is not working. These layoffs will impact teams working on virtual reality headsets and Horizon Worlds, Meta’s VR-based social network.

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However, the employees working on the Ray-Ban smart glasses are safe. Those smart glasses have actually been a success story, selling over 2 million units.

The Reason Behind Meta’s Layoffs

Since 2020, Meta’s Reality Labs division has burned through billions in losses while struggling to attract mainstream consumers. In the latest financial quarter, Reality Labs posted a net loss of $4.4 billion.

But losses were just one part of the story. The biggest reason for job cuts at Reality Labs behind the move is Meta’s push into AI.

With companies like OpenAI and Google leading the AI race, Meta had clearly fallen behind. 

So, Mark Zuckerberg has been redirecting company resources toward AI development, pouring billions into data centers and offering lucrative pay packages to attract top AI researchers.

In fact, Meta recently announced “Meta Compute,” a massive infrastructure project that Zuckerberg says will create data centers with tens of gigawatts of capacity.

Nobody has infinite money. The current trend is AI, and Meta understands that they will have to run faster to become a key player.  And since AR & VR are still not that big, Reality Labs became the obvious target to make more funds available for AI.

The cuts were already in the plans for months. Last month, the cuts were expected to be up to 30% of the whole division.

Nissa Anklesaria, a Meta spokeswoman, said last month:

“Within our overall Reality Labs portfolio, we are shifting some of our investment from Metaverse toward A.I. glasses and wearables, given the momentum there.” 

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The layoffs were discarded back then, but now they are actually happening.

But this isn’t the only big blow Reality Labs has taken. Back in April 2025, Meta cut jobs in Oculus Studios, and that round of layoffs hit people working on Supernatural, the popular VR fitness game. Just a few months ago, 600 employees were laid off in Meta's Fundamental AI Research (FAIR) group.

Over the past few years, thousands of Meta employees have been laid off as the company reshaped its workforce to make more room for AI.

Bottom Line

Does this signal the death of Meta’s metaverse? Not really, but it does show a big step back for now.

Meta appears to be betting that the future won’t involve bulky VR headsets that isolate users in fully virtual worlds. Instead, the company is pivoting toward augmented reality glasses and AI-powered wearables, like Ray-Ban glasses.

But changing the priorities means 1,500 employees will be jobless, who dedicated themselves to their time and effort to build the CEO’s dream project.