Meta lays off VR employees, underscoring Zuckerberg’s pivot to AI

A little over four years after Mark Zuckerberg changed Facebook’s name to Meta, reflecting his view that the future of work, play and socializing was going virtual, the company is making a major course correction. 

Meta this week began laying off employees focused on virtual reality within its Reality Labs division and is shutting down a number of studios that were working on VR titles, according to people familiar with the matter who asked not to be named due to confidentiality. CNBC confirmed a report from the New York Times that layoffs, amounting to more than 1,000 jobs, will impact about 10% of the hardware division, which makes Quest VR headsets, and the Horizon Worlds virtual social network. 

Andrew Bosworth, Meta’s chief technology officer, is slated to hold an all-hands meeting with Reality Labs on Wednesday, some of the people said.

Meta is scaling back its metaverse ambitions as the company continues ramping up its investments in artificial intelligence, Zuckerberg’s more recent obsession and the technology that’s consumed Silicon Valley and the broader industry. Zuckerberg has been paying big bucks for top AI talent, most notably shelling out $14.3 billion in June to hire Scale AI founder Alexandr Wang, who’s now leading AI strategy, along with other engineers and researchers from the startup.

In October, Vishal Shah, who spent four years leading the company’s metaverse efforts, was named vice president of AI products. That month Meta lifted the range of its 2025 capital expenditures to between $70 billion and $72 billion and said dollar growth would be “notably larger” in 2026.

The studios that are closing as part of the latest changes include Armature Studio, Twisted Pixel, and Sanzaru, as well as a technical unit called Oculus Studios Central Technology, sources told CNBC. Jobs are also being cut at other studios including Ouro Interactive, which Meta debuted in 2023 to build first-party content for Horizon Worlds.

Supernatural, a VR fitness app that Meta purchased for $400 million in 2023, was moved into maintenance mode, meaning it will be run by a skeleton crew and no longer receive new content, said people with knowledge of the matter.

Meta laid the groundwork for this week’s announcement in December, when the company said it would be shifting resources within Reality Labs’ budget away from its VR initiatives toward its endeavors with AI glasses and wearable devices.

“This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year,” a Meta spokesperson said, without commenting specifically on the layoffs.

While Meta’s VR projects have never taken off, the company has had better success in AI-powered wearables, particularly through a…