In early January 2026, Meta laid off 10% of employees of Reality Labs, their virtual reality company. The number of personnel cut is said to be up to 1,000 people. In the latest development, Meta emphasized that Reality Labs lost billions of USD in 2025.
Meta's latest earnings report shows that the company's struggling virtual reality business segment lost about 19.1 billion USD in 2025, slightly higher than the loss in 2024 (that year, the loss fluctuated around 17.7 billion USD). The report also shows that in the fourth quarter of 2025, this segment recorded a loss of 6.2 billion USD.
In the opposite direction, the revenue that this segment brings to Meta is quite low, with 955 million USD in the fourth quarter of 2025 and a total of 2.2 billion USD in the whole year of 2025.
For Reality Labs, we are focusing most of our investment capital on virtual reality glasses and wearable devices, while focusing on making Horizon a major success on the mobile platform and turning VR into a profitable ecosystem in the coming years," said Mark Zuckerberg, CEO of Meta.
Despite placing high expectations for the future, Mark Zuckerberg also noted that Reality Labs' losses in 2026 may be similar to 2025, and may even reach a "peak", before gradually decreasing in the following years.
When Meta announced a shift to "metaverse" in 2021, this move faced certain skepticism and in its first year operating in the virtual reality field, the company faced harsh criticism.
Nearly half a decade later, that skepticism has not subsided. As the virtual reality business continues to lose money and Meta continues to shift strongly from virtual reality to artificial intelligence, it is still unclear what will help revive their struggling business.
According to US media, in addition to firing employees, Meta also plans to close some of its virtual reality studios - another sign that the company's interest in virtual reality is decreasing.
The company recently announced that it will stop operating the independent Workrooms application - an application that the company has promoted to office workers as a virtual reality space that can be used to organize meetings.
