Mark Zuckerberg planning to cut budget by billions of dollars for the project for which Facebook and Instagram owner changed its name

Facebook founder and Meta CEO Mark Zuckerberg is reportedly planning significant resource cuts for the company’s metaverse project which was once hailed as the future of the company and the main reason behind the corporate name change from Facebook. Citing sources familiar with internal discussions, Bloomberg reports that the company executives are considering potential budget cuts as high as 30% for the metaverse group next year. This division includes the virtual worlds platform Meta Horizon Worlds and its Quest virtual reality (VR) unit.

Meta may make deep cuts in Reality Labs

The proposed deep cuts are part of the company’s annual budget planning for 2026, the report said, adding that while Zuckerberg typically requests a standard 10% reduction across all groups, the metaverse division was asked to cut deeper this year. This is reportedly because Meta is not seeing the anticipated level of industry-wide competition for the technology.


The majority of the proposed budget reduction is expected to impact Meta’s virtual reality group, which accounts for the bulk of metaverse-related spending. The report also noted that resource cuts may also include layoffs as early as January, though a final decision has not been announced. The company’s metaverse effort comes under the Reality Labs division. The team focuses on hardware like VR headsets and AR glasses. Since the start of 2021, the division has lost more than $70 billion.

Meta wants to shift focus to AI

Zuckerberg has shifted his public focus to AI and has largely ceased mentioning the metaverse on earnings calls, the report noted. The company seems to be emphasising on the development of large AI models, AI chatbots, and associated hardware products, such as Meta’s Ray-Ban smart display glasses.

Previously, Mike Proulx, a vice president at Forrester, predicted that Meta would “shutter its metaverse projects, like Horizon Worlds,” arguing that doing so “would allow the company to give more focus to its AI projects including Llama, Meta AI, and AI glasses.”