Meta may cut Metaverse spending by a massive 30%

If you were holding your breath for a digital world you could fully immerse yourself in, you might want to exhale. It looks like the dream of living as a legless avatar is growing increasingly closer to being just that…a dream.

According to a new Bloomberg report, Meta is preparing to trim its Reality Labs division, and the cuts are expected to be deep. About a potential 30 per cent reduction in budget, which could arrive as early as January 2026.

AI is eating up the Metaverse

Reality Labs is the part of the company responsible for VR and the “Metaverse.” A staggering $70 billion has been poured into this project since 2021.

Now, it seems the writing is on the wall. While the company isn’t scrapping everything, the focus is clearly shifting. The report suggests that the brunt of these cuts will be borne by Horizon Worlds and the broader VR team. The enthusiasm just isn’t there. It turns out that most people prefer scrolling through Instagram on a phone rather than strapping a computer to their face to attend a virtual meeting.

That doesn’t mean hardware is dead, though. Interest is being moved toward augmented reality and smart glasses, like the Ray-Ban collaborations. These are less about escaping reality and more about layering helpful AI assistants over it.

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Investors seem to be taking the news very well, as shares rose 4% on Thursday. With spending cuts on Metaverse, the company is now pouring resources into data centres and “superintelligence,” which is exactly what those investors have been begging for for years.