Meta Scales Back VR Ambitions as Slower Adoption Prompts Reality Labs Layoffs
Meta trims Reality Labs workforce as slower VR adoption pushes the company to refocus investments on wearables and practical technologies.
Meta is reassessing the pace of its virtual reality ambitions, trimming jobs and scaling back projects inside its Reality Labs division as adoption of VR headsets falls short of expectations. The decision marks a shift in priorities for the company once betting heavily on the metaverse as the next big chapter of computing.
Speaking from the World Economic Forum in Davos, Meta’s Chief Technology Officer Andrew Bosworth addressed the layoffs during a podcast, offering a straightforward explanation for the company’s pullback. According to him, the growth of virtual reality simply hasn’t matched the aggressive forecasts Meta made when it rebranded from Facebook in 2021.
“We’re still continuing to invest heavily in this space, but obviously, VR is growing less quickly than we hoped,” Bosworth said during the conversation. He added that companies need to be practical when growth slows. “And so, you want to make sure that your investment is right-sized.”
The restructuring reportedly affects roughly 10 percent of employees working on metaverse-focused VR initiatives, translating to more than 1,000 roles. Cuts span hardware teams responsible for Quest headsets, along with staff building platforms such as Horizon Worlds, Meta’s virtual social environment.
Once positioned as the centerpiece of the company’s future, Reality Labs is now under tighter scrutiny. Industry analysts say Meta appears to be recalibrating its expectations, acknowledging that immersive virtual worlds may take longer to become mainstream than initially believed.
As part of the cost-cutting effort, Meta is closing several internal studios dedicated to VR games and experiences. Among those affected are Armature Studio, Twisted Pixel and Sanzaru, as well as Oculus Studios Central Technology. Other teams, including Ouro Interactive, created to develop original Horizon Worlds content, are also seeing reductions.
The retreat goes beyond entertainment. Meta recently confirmed it will discontinue Horizon Workrooms, a virtual office collaboration app. A notice on the company’s help pages reads, “Meta has made the decision to discontinue Workrooms as a standalone app, effective February 16, 2026.”
The company is also winding down its enterprise VR business. Sales of Meta Quest headsets and Horizon-managed services for corporate customers will end on February 20, 2026. However, existing clients will retain access to services until January 4, 2030, and licences will be offered free of charge after mid-February 2026.
These moves reflect a broader strategic pivot. While Meta hasn’t abandoned virtual reality entirely, it is redirecting resources toward products that fit more naturally into daily life. Smart glasses, AI-powered wearables and mobile-first experiences are emerging as priority areas for investment.
Back in December 2025, Meta had already signaled this change, announcing plans to reduce VR spending and funnel savings into wearable technologies. At the time, the company avoided directly addressing potential job cuts but made clear that capital would be redeployed to faster-growing segments.
For Meta, the message is pragmatic: the metaverse remains part of the vision, but the road ahead may be longer — and leaner — than once imagined.
