The Year's First Big Tech Layoffs Have Arrived

Meta is dialing back its virtual world and betting big on something you can actually wear on your face. The company is cutting more than 1,000 jobs in its Reality Labs division, the group behind its metaverse push. The move, disclosed in an internal post from CTO Andrew Bosworth seen by Bloomberg and confirmed by Meta, marks the first major Bay Area tech layoff of 2026. The company's core apps—Facebook, Instagram, and WhatsApp—aren't affected by this round of cuts. Bloomberg reports that the cuts are expected to involve up to 10% of the 15,000 Reality Labs workers. Three of Meta's virtual reality game studios have been shut down, including Twisted Pixel, maker of "Deadpool VR," Kotaku reports.

Meta spokesperson Tracy Clayton said the layoffs are part of a shift in spending "from Metaverse toward Wearables," with plans to plow the savings into expanding its wearables business this year. The retrenchment caps a long comedown from CEO Mark Zuckerberg's 2021 rebrand and sweeping promises of an "embodied internet" where a billion people would work and play in shared virtual spaces. Instead, the metaverse hype cycle fizzled, Horizon Worlds never caught on, and Meta's legless avatars became a punchline, SFGate reports. Reality Labs burned through more than $71 billion since 2021, losing $17.7 billion in 2024 alone while consuming about a fifth of companywide costs.

Now, Meta is steering those billions toward products that are actually selling. Its relatively affordable Quest headsets have reviewed well, and demand is strong enough that Meta is reportedly weighing a production boost for its AI-enabled Ray-Ban glasses. Zuckerberg has floated a future in which people not wearing such high-tech frames are at a "cognitive disadvantage."