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Meta Announces Metaverse Budget Cuts as Focus Shifts to AR Glasses



Meta to Reduce Metaverse Spending in Favor of AI and VR Glasses Development



Meta Platforms is reportedly planning to cut its metaverse investment by up to 30%, reallocating funds toward artificial intelligence and next-generation virtual reality glasses. Although no definitive decision has been announced, sources indicate that budget reductions and potential layoffs are under consideration for Meta’s Reality Labs division, primarily impacting its virtual reality initiatives. The move reflects a strategic shift as the company recalibrates its focus amidst the evolving tech landscape.



Key Developments and Market Response



  • Meta plans to implement budget cuts as early as January, redirecting resources toward its augmented reality glasses projects.

  • Shares surged over 5% at the opening of the market on Thursday, closing the day with a 3.4% gain, signaling investor optimism.

  • The company, which rebranded from Facebook in 2021 with ambitions to develop a comprehensive metaverse, has poured billions into research and development of virtual reality technology.

  • The sector’s growth has slowed as major tech firms, including Apple and Google, scaled back their VR efforts, diminishing competitive pressure on Meta.




Meta shares jump in early trading
Shares in Meta initially spiked over 5% when markets opened, according to Google Finance.



Meta’s renewed focus on augmented reality glasses signals a strategic pivot away from its initially ambitious metaverse plans. Despite billions invested since 2021, interest in virtual worlds has waned amid broader industry shifts toward artificial intelligence, which has captivated tech giants and investors alike. The slowdown has led to internal reassessments, with reports indicating that Meta's VR unit might face budget cuts aligned with its 2026 planning cycle.



The company’s competitors, including Apple and Google, previously dedicated significant resources to developing their own VR hardware, but ongoing delays and strategic re-evaluations have lessened the urgency to compete head-on. Nonetheless, startups like Infinite Reality continue exploring metaverse applications, such as music streaming integrations, while other projects like those led by Donald Trump’s company have filed trademarks for metaverse and NFT marketplaces, indicating continued industry activity.



Meanwhile, Meta’s CEO Mark Zuckerberg communicated in a post on his Threads platform that the company is establishing a new creative studio within Reality Labs dedicated to design, fashion, and technology. Zuckerberg emphasized the transformative potential of AI glasses, aiming to make future interactions seamless, intuitive, and centered around user experience.



Despite strategic adjustments, Meta remains committed to innovation in augmented reality and immersive tech, seeking to redefine human connection through smarter, more natural interfaces. The ongoing evolution of Meta’s metaverse ambitions highlights the shifting priorities across the tech industry, as firms balance hype against practical application and market demand.



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