• by Colin Kirkland , April 24, 2025

Despite reporting a significant boost in revenue last quarter, Meta’s Reality Labs division -- responsible for the tech giant’s VR and AR products -- is shrinking, with an unspecified number of employees being laid off on Thursday.

According to a report by The Verge, Meta’s job cuts impacted teams working in Oculus Studios, the company’s in-house games division for its VR Quest headsets. Additional employees were let go from the Reality Labs’ hardware sector as well. 

Upcoming games like “Supernatural” – a virtual fitness game Meta acquired for $400 million in 2023 after winning a lawsuit filed by the Federal Trade Commission -- may be affected by the layoffs.

“Some teams within Oculus Studios are undergoing shifts in structure and roles that have impacted team size,” Meta spokesperson Tracy Clayton said in a statement. 

In line with Meta CEO Mark Zuckerberg’s “year of efficiency,” which saw the elimination of over 10,000 jobs in 2023, Clayton added that these recent cuts have been made to “help Studios work more efficiently on future mixed reality experiences.”

Last summer, Meta divided Reality Labs into two distinct sectors – “Wearables” and “Metaverse” – in order to better “articulate the value that’s generated here across both segments,” according to Zuckerberg, who wants to better showcase the success of Meta’s Ray-Ban Smart Glasses. 

Because of Meta’s partnership with Ray-Ban, Reality Labs exceeded Q4 projections, generating $1.1 billion in sales – a 40% bump year-over-year – but still losing $4.97 billion total. Overall, Reality Labs has suffered an operating loss of over $60 billion since 2020, with expectations to invest around $60 billion more this year. 

Unlike its Smart Glasses, however, Meta’s Quest 3S -- released last fall --2025-04-24 is not selling as well as the company expected, already on sale for 10 percent off in some markets.