Meta’s Reality Labs division, tasked with building the company’s virtual and augmented reality future, is facing another round of workforce reductions, according to a company spokesperson. The company confirmed job cuts affecting an unspecified number of employees within the unit responsible for Quest headsets and metaverse development. These adjustments come as the division continues to operate with substantial financial deficits.
Teams within Oculus Studios, Meta’s group for creating VR games, are impacted by the restructuring. Notably, staff working on Supernatural, the VR fitness application Meta acquired for over $400 million and later successfully defended against a US government antitrust challenge, are among those affected.
A note circulated within the official Supernatural Facebook group mentioned that “these changes are meant to help us work more efficiently on what the future of fitness could be.” Some employees involved in Meta’s hardware initiatives are also part of the current cuts.
Efficiency Goals Amid Persistent Losses
Meta frames these personnel changes as part of an efficiency drive. “Some teams within Oculus Studios are undergoing shifts in structure and roles that have impacted team size,” stated spokesperson Tracy Clayton.
He added, “These changes are meant to help Studios work more efficiently on future mixed reality experiences for our growing audience, while still delivering great content for people today.” Clayton affirmed Meta’s commitment to investing in mixed reality, fitness, and games, stating the “drive to deliver the best experiences possible for the Quest and Supernatural communities remains unchanged.” The company did not provide details on cuts outside of Oculus Studios.
The division’s financial performance provides a stark background for these actions. Reality Labs reported an operating loss nearing $5 billion for the fourth quarter of 2024 alone, contributing to over $13 billion in losses for the full year, according to Meta’s investor reports. These persistent deficits appear to be driving the ongoing efforts to reshape the division.
While Meta has found success with its Ray-Ban smart glasses, sales of which reportedly grew faster than anticipated, its core Quest VR headsets have faced difficulties gaining broad market traction, with the recent Quest 3S model currently available at discounted prices.
A Pattern Of Recalibration
The job reductions are the latest in a sequence of adjustments within Reality Labs over the past year. In August 2024, Meta shut down Ready at Dawn Studios, the developer behind VR titles like Lone Echo, as part of a stated goal to decrease the division’s budget by 20 percent before 2026.
That same month saw the cancellation of ‘La Jolla,’ a planned high-end mixed-reality headset, attributed to the high cost of components like micro OLED displays and a cool market reception for premium XR devices. Meta also ceased internal development of custom silicon for AR glasses around that time, shifting to Qualcomm chips to reduce expenses. The $999 Quest Pro headset was also discontinued in 2023 following weak sales.
Company-Wide Shifts And AI Focus
The current Reality Labs staffing changes occur within the context of a larger, ongoing restructuring across Meta implemented earlier this year. Only a few months ago, the company initiated performance-based layoffs affecting about 5% of its total workforce (around 4,000 roles), termed “non-regrettable attrition.” A Meta executive explained then that “We have really ambitious goals, so we need to manage our workforce in a way that ensures we have the strongest talent working here and can move faster in managing our low performers.”
That period also involved merging the Facebook and Messenger teams. In a previously reported internal meeting, CEO Mark Zuckerberg stressed the challenge of balancing existing platforms with future efforts, reportedly stating, “If we can’t build Facebook and the next platform at the same time, then eventually game over.”
Intriguingly, while implementing these broad cuts, Meta simultaneously launched an accelerated hiring program specifically for hundreds of machine learning and AI engineers. Peng Fang, Meta’s VP of Engineering for Monetization, wrote internally at the time, “We need to hire many engineers in 2025,” signaling a clear strategic redirection of resources towards artificial intelligence initiatives. This field represents a major investment area for Meta and includes newer projects like the robotics group established within Reality Labs in February.
