According to Inc, Mark Zuckerberg is finalizing deep budget cuts to Meta’s flagship Metaverse project. Reports from Bloomberg and The New York Times indicate the Metaverse team, which works on VR headsets and the Horizon Worlds platform, could see its budget slashed by up to 30%. The plan includes laying off between 10% and 30% of the unit’s personnel, with resources being shifted to other successful divisions. This strategic retreat comes after Zuckerberg’s grand 2021 announcement, where he rebranded Facebook as Meta to signal his commitment. Since then, the project has struggled, with its Reality Labs division losing over $70 billion since the start of 2021. The cuts are reportedly more severe here due to a perceived lack of competition in the space.
Meta’s Pivot and the Competitive Landscape
So, what does this mean? Basically, the “metaverse-first” era at Meta is over. Zuckerberg is pulling back from a moonshot that was burning cash at an astonishing rate. The reallocation of resources is telling—he’s moving money toward what’s actually working, which recent reports suggest is the team behind their AI-powered smart glasses. That’s a pragmatic, if unglamorous, admission that building a virtual world everyone wants to use is a lot harder than it looked in 2021.
And here’s the thing: the competitive landscape never really materialized the way Meta hoped. They were betting big on being the platform, but without fierce competition, there was less urgency and, frankly, less reason for consumers to care. Apple’s Vision Pro entered the scene, but it’s a high-end niche product with a different philosophy. Other players like Microsoft or Roblox have their own angles, but no one else was spending tens of billions to will a single, unified Metaverse into existence. When you’re the only one running the race, it’s easier to decide to just… stop running.
Winners, Losers, and the AI Shift
This is a clear win for Meta’s AI and hardware teams that are showing real user traction. They’re getting the resources that were once funneled into a virtual void. The losers, obviously, are the employees on the Metaverse teams and the true believers in that specific vision. But look, the bigger story might be about the complete shift in tech’s center of gravity. In 2021, the Metaverse was the future. In 2025, it’s all about AI. Meta is just following the oxygen in the room—and the potential for revenue.
Does this kill the concept of the metaverse entirely? Probably not. But it does signal that the top-down, “build it and they will come” approach led by a single social media company has failed. Future virtual spaces will likely evolve from existing games and platforms, not from a corporate mandate. For now, Zuckerberg’s vision seems more distant than ever, and his company is wisely choosing to focus on the present.
