• by Colin Kirkland , Yesterday

Facebook changed its name in 2021 to reflect the company’s newfound dedication to the interconnected virtual world concept known as the metaverse.

Now, Meta is dialing back its intentions of being “a metaverse company,” reportedly reducing its metaverse budget.

According to a report from Bloomberg, Meta will cut spending by up to 30% on Meta Horizon Worlds and Quest virtual reality (VR) development as part of the company’s annual budget planning for the new year. 

In response to the report, Meta stock surged over 6%. ''Since its creation in 2020, investors have had concerns over Meta’s metaverse division Reality Labs -- which suffered an overall operating loss of $60 billion, including a $5 billion loss, this past quarter. 

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 said he wants to better showcase the success of Meta’s Ray-Ban Smart Glasses. 

However, Meta’s Horizon Worlds metaverse platform has not attracted the volume of users originally expected and the Quest headsets have not sold as strongly as other Meta hardware such as the AI-powered Smart Glasses.

Prior to Bloomberg’s report, Meta was expected to invest around $60 billion more in Reality Labs throughout 2026.

Per the potential budget cuts, Meta is expected to see further layoffs as early as next month, following CEO Mark Zuckerberg’s “year of efficiency” that saw the elimination of over 10,000 jobs in 2023.

In October, Meta forecast larger capital expenses for 2026 as part of its pivot to artificial intelligence development, committing up to $72 billion overall.