Meta intends to reduce the unity of the metaverse by around 10% while prioritizing artificial intelligence

Meta is preparing to reduce headcount at its Metaverse division by about 10%, a move that underscores the company’s accelerating shift toward artificial intelligence.

Most important key points:

• Meta plans to cut about 10% of its Reality Lab staff while shifting its investments from the Metaverse to artificial intelligence.
• The move comes after years of heavy losses for Reality Labs and a lower-than-expected user adoption rate.
• Gaming-focused worlds dominate engagement, while blockchain and enterprise virtual worlds continue to struggle to attract users.

According to a New York Times article, citing sources familiar with the matter, the layoffs could be announced as early as Tuesday.

The cuts are expected to affect Reality Labs, the unit responsible for Meta’s virtual and augmented reality ambitions.

Metaverse’s Reality Labs faces layoffs of around 1,500 employees as it withdraws from the Metaverse

Reality Labs employs approximately 15,000 people and oversees hardware such as virtual reality headsets as well as virtual platforms including Horizon Worlds and Horizon Workrooms.

A reduction of around 10% will affect around 1,500 employees. Meta declined to comment on the report.

The move follows a series of budget adjustments that indicate a cooling of commitment to the Metaverse, with Meta doubling down on its investments in AI.

In early December, the company’s shares rose after reports indicated that Meta was considering cutting up to 30% of its Metaverse spending and redirecting those resources toward AI development.

The latest report also indicates that Meta plans to shift some of Reality Labs’ funding to its wearables business, which includes smart glasses and wrist-worn devices such as Meta Neural Band.

Meta, formerly known as Facebook, renamed in October 2021 in a historic bet on virtual worlds, virtual reality and augmented reality.

This shift occurred as metaverse projects were gaining momentum in the tech and cryptocurrency spaces, but user adoption struggled to meet initial expectations.

Since Reality Labs launched in August 2020, the unit has racked up losses of more than $70 billion.

In Meta’s latest earnings report for Q3 2025, Reality Labs reported an operating loss of $4.4 billion.

The broader Metaverse market has also shown mixed reactions. Gaming-focused platforms, such as Roblox and Fortnite, remain dominant, each attracting hundreds of millions of users.

Outside of these ecosystems, activity levels are much lower. Virtual worlds based on Blockchain technology have seen very limited demand, as the Sandbox platform recorded only 776 unique active wallets in the last 30 days, according to data from Dab Radar.

Some reports have also indicated that Meta’s Horizon Worlds game has less than 900 daily active users.

Meta shareholders rejected call to add bitcoin to company treasury

In June of last year, Meta investors overwhelmingly rejected a proposal urging the company to consider adding bitcoin to its balance sheet, according to a May 28 filing.

The measure received only 3.92 million votes in favor, or about 0.08% of the total vote, while nearly 5 billion voted against.

With CEO Mark Zuckerberg controlling 61% of the voting power, the outcome was effectively predetermined.

The proposal came from Ethan Beck, a Bitcoin supporter, who argued that Meta should allocate a portion of its $72 billion cash balance to Bitcoin as a hedge against inflation and declining real returns on cash and bonds.

Beck cited advice from BlackRock that supports allocating a small amount of Bitcoin and made the proposal on behalf of his family’s Meta stock holdings.

He is Director of Bitcoin at Strive and has led similar campaigns at other tech giants.

The article Meta Company Intends to Shrink Metaverse Unit by About 10%, While Prioritizing Artificial Intelligence appeared first on Cryptonews Arabic.