Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) shares added more than 4% on reports CEO Mark Zuckerberg is considering scaling back the company’s Metaverse investments.
According to a Bloomberg News report, Meta executives have discussed potential budget cuts of up to 30% for the metaverse group in 2026, which includes Meta Horizon Worlds and the Quest virtual reality unit.
While no final decisions have been made, the reductions could result in layoffs as early as January.
The proposed cuts are part of Meta’s annual budget planning process, which included a series of meetings at Zuckerberg’s Hawaii compound last month, per the report.
The CEO has reportedly requested executives to explore 10% cuts across the company, a standard measure during prior budget cycles, though the metaverse division appears to be facing deeper reductions.
Bloomberg reported that Meta has not encountered the level of industry-wide competition in metaverse technology that it once anticipated.
The majority of the proposed reductions would likely affect the company’s virtual reality group, which accounts for most of Meta’s metaverse spending, as well as Horizon Worlds.
Meta has invested heavily in metaverse projects since 2021, including rebranding from Facebook and allocating billions annually to the effort.
Despite this, growth in the metaverse unit, known as Reality Labs, has lagged behind expectations.
Recent quarterly results showed ongoing losses for Reality Labs, even as VR hardware sales continued.
Meta shares traded hands at $667 on Thursday morning, up almost 14% this year.