The layoffs affect teams building VR experiences for the Meta Quest headset and employees working on hardware-related operations. According to a Bloomberg report, more than 100 people have been let go as part of an internal restructuring meant to avoid overlapping work across different teams.

Meta Platforms is back in the headlines for another round of layoffs, this time from its Reality Labs division, the arm responsible for the company’s virtual and mixed reality efforts. The latest job cuts come just ahead of the company’s Q1 2025 earnings report, raising eyebrows about the future of its much-hyped metaverse investments.

Meta’s in-house VR gaming studio

Among those impacted are developers from Oculus Studios, Meta’s internal game development unit. This includes the team behind Supernatural, a VR fitness game that lets users work out with coaches using Meta Quest headsets. Meta acquired Supernatural’s parent company for about $400 million in 2021. The deal, which faced regulatory heat from the US Federal Trade Commission, finally cleared in 2023.

A Meta spokesperson said the company is reorganising the studio to “work more efficiently on future mixed reality experiences for our growing audience.”

Earlier this year, Meta laid off around 3,600 employees, or 5% of its workforce, in what it called performance-based terminations. At the end of 2024, Meta’s total headcount stood at 74,067.

Mounting losses, stubborn optimism

The timing of the layoffs, just days before Meta’s earnings announcement, is being viewed as a pre-emptive move to address questions from investors concerned about spending and efficiency in Reality Labs.

Meta hasn’t disclosed the exact number of people affected, but the latest round continues the tech industry trend of slimming down moonshot projects.

Reality Labs continues to be a money sink for Meta. In the fourth quarter alone, the division reported a loss of USD 5 billion (roughly INR 43,500 crore). That figure adds to growing pressure on the company as it doubles down on metaverse hardware, even as profits remain elusive.

Despite the financial drag, CEO Mark Zuckerberg remains bullish on the long-term vision. The company has shown no signs of backing away from its AR and VR plans.

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