Meta Reality Labs Layoffs 2026: The Cost of the AI Pivot

The Metaverse is losing its throne. Meta is reportedly shedding a tenth of its workforce within its hardware division to fuel the company's aggressive AI ambitions. It's a clear signal that the era of unbridled spending on virtual reality is over.

Meta Reality Labs Layoffs Context

According to The New York Times, Reality Labs is expected to lose around 10% of its staff, with the cuts primarily targeting the metaverse and VR employees. With the division currently employing approximately 15,000 people, this move could see nearly 1,500 specialists exiting the firm. Andrew Bosworth, Meta’s CTO, urged staff to attend a mandatory in-person meeting on Wednesday, describing it as the "most important" session of the year.

Cannibalizing VR for AI Supremacy

The layoffs are widely viewed as a side effect of Meta's massive resource reallocation toward Generative AI. As competition with giants like Google and OpenAI intensifies, Meta doesn't have the luxury of funding the Reality Labs money pit without showing significant efficiency gains. The focus is shifting from building a separate digital world to integrating intelligence into its existing social platforms and upcoming smart glasses.