Meta Shifts Focus: Reality Labs Downsized as AI Investment Accelerates

Meta Platforms is implementing a significant strategic pivot, marked by substantial workforce reductions within its Metaverse division, Reality Labs. The company is eliminating over 1,000 positions and shuttering several virtual reality game studios, including Twisted Pixel, Sanzaru Games, and Armature Studio. This restructuring impacts approximately ten percent of the unit’s employees and signals a clear move away from costly, long-term VR projects that have yet to generate meaningful revenue.

Since 2021, cumulative losses from Meta’s virtual reality ambitions have reached a staggering $73 billion. In response, CEO Mark Zuckerberg is now channeling greater resources toward artificial intelligence infrastructure and commercially successful wearable technology, such as the Ray-Ban Meta Smartglasses.

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