Meta may be preparing major cutbacks to its Metaverse ambitions, according to a recent Bloomberg report citing anonymous sources. Company executives are reportedly considering reducing the Metaverse division’s budget by as much as 30%, a decision that may also include another round of layoffs. If confirmed, this would mark one of the largest strategic pullbacks since Meta rebranded from Facebook in 2021.
The potential budget reduction highlights a shift in Meta’s priorities as interest in its virtual world platform, Horizon Worlds, and its VR hardware lineup continues to decline among both developers and consumers. The Metaverse, once positioned as the future of social computing, has struggled to attract sustained engagement and commercial traction.
Why Meta Is Reconsidering Its Metaverse Strategy
Meta has invested billions of dollars quarterly into building virtual reality ecosystems, yet adoption has not matched expectations. Since the company’s rebrand, both investors and analysts have questioned whether these investments aligned with market readiness.
Meanwhile, Meta’s pivot toward generative AI, wearable smart glasses, and advanced assistant technologies has been received much more positively. Products like the Meta Ray-Ban smart glasses and AI features across Instagram and WhatsApp have shown stronger early adoption and clearer revenue potential.
Investor Reaction and Market Response
Interestingly, Meta’s stock price rose following the news of the potential cutbacks a signal that investors view the move as a practical course correction rather than a retreat in innovation. Investors have long expressed concern about high spending on Metaverse development, especially during economic uncertainty and AI competition intensifying from companies like OpenAI, Google, and Microsoft.
What Comes Next for Meta?
Although a downsizing may signal a cooling of its Metaverse dreams, Meta is unlikely to abandon the vision entirely. Instead, analysts predict the strategy may evolve toward a slower rollout, more focused use cases, and tighter alignment with AI-powered immersive experiences.
Meta did not immediately issue a public response to the report, leaving industry watchers waiting for official confirmation possibly during upcoming earnings calls or strategic update events.
