Mark Zuckerberg weighs deep cuts to Metaverse division as Meta reorients spending towards AI

Meta Platforms chief Mark Zuckerberg is preparing to significantly scale back investment in the company’s metaverse division as the tech giant shifts more attention and resources towards artificial intelligence, according to a Bloomberg report. Executives are evaluating budget reductions of up to 30% for the metaverse group in the next financial year, a unit that includes the virtual worlds platform Meta Horizon Worlds and the Quest virtual-reality hardware division, people familiar with the plans informed Bloomberg, adding that such cuts would likely result in layoffs as early as January although no final decision has been taken.

The potential restructuring forms part of Meta’s wider budgeting process for 2026, which involved a series of planning meetings at Zuckerberg’s compound in Hawaii last month. People briefed on the discussions said Zuckerberg has asked senior leaders to identify 10% savings across teams, a recurring target seen in recent budget cycles. However, the metaverse division has reportedly been instructed to cut more deeply this year as Meta has not witnessed the level of industry competition around virtual worlds and VR that it had previously anticipated.

Most of the proposed reductions are expected to affect Meta’s virtual-reality group, which represents the majority of the company’s metaverse expenditure, with further cuts likely to hit Horizon Worlds, Bloomberg stated. Meta’s metaverse push has long drawn scepticism from investors, who view it as a costly distraction, as well as criticism from regulators concerned about privacy and child safety inside the company’s virtual platforms.