META Platforms began 2026 with a major strategic retreat from its “metaverse-first” vision, announcing on Wednesday the layoff of more than 1,000 employees within its Reality Labs division. The cuts account for roughly 10% of the division’s roughly 15,000 employees.

“This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year,” a company spokesperson said. “We said last month that we were shifting some of our investment from the metaverse toward wearables.”

The Facebook owner is scaling down its work on virtual reality (VR) and the broader metaverse strategy that generated significant buzz during the pandemic and prompted the company to rename itself Meta in October 2021. Reality Labs, created around the same time, has lost more than US$70 billion since then.

The latest layoffs signal a decisive shift in investment toward AI-powered wearables and tighter mobile integration. Meta hopes to become “more sustainable” by pivoting the metaverse push toward mobile devices and trimming VR spending, according to an internal memo from CTO Andrew Bosworth.

The restructuring has hit Meta’s gaming ambitions particularly hard, prompting the immediate closure of several VR game studios, including Armature, Sanzaru and Twisted Pixel. While VR fitness app “Supernatural” will continue to support its existing offering, development of new content and features will be put on hold.

Tamara Sciamanna, director of Oculus Studios, told staff that gaming will remain a key focus at Meta. “Gaming remains the cornerstone of our ecosystem. With this change we are shifting our investment to focus on our third‑party developers and partners to ensure long‑term sustainability,” she wrote in an internal memo.

The Reality Labs division has faced smaller-scale layoffs before. In April 2025, Meta cut staff working on the VR fitness game “Supernatural,” though it did not disclose the number of employees affected.(SD-Agencies)