Meta has commenced layoffs affecting hundreds of employees this week, focusing on its Reality Labs division as well as social media and recruiting teams. This move aligns with earlier reports suggesting the company might reduce its workforce by up to 20%. However, the current cuts represent only a small fraction of Meta’s nearly 79,000 employees, as reported in its 2025 annual filing.
In a notable strategic shift, Meta has scaled back its metaverse ambitions, which initially motivated its rebranding in 2021. Earlier this year, the company announced the closure of Horizon Worlds for its Quest VR headset, planning to concentrate on the mobile platform instead. Following user feedback, Meta reversed this decision but will restrict access to existing VR experiences without launching new ones. The Reality Labs team, responsible for Horizon Worlds and the Quest hardware, is among those affected by the layoffs.
The primary driver behind these job cuts is Meta’s intensified focus on artificial intelligence. CEO Mark Zuckerberg revealed plans to nearly double AI spending in 2026, allocating up to $135 billion—an amount close to the total spent over the past three years combined. Despite this massive investment, Meta has faced setbacks, including delays with its new foundational AI model, codenamed Avocado, which underperformed against Google’s Gemini 3.0 in initial tests.
This trend of heavy AI investment coupled with workforce reductions is not unique to Meta. Earlier in 2025, Amazon announced layoffs of 16,000 employees, while Microsoft cut over 15,000 jobs, reflecting broader industry adjustments amid escalating AI development costs.
