New Delhi: Meta has announced another round of layoffs in its Reality Labs division, cutting around 1,500 jobs as the company recalibrates its long-term virtual reality strategy. While the move has reignited criticism around Meta’s massive bets on the metaverse, the most striking response has come from an unexpected voice, Oculus founder Palmer Luckey.
Luckey, who was once fired by Meta, has publicly defended the decision, calling the layoffs a “good and necessary” step for the health of the VR ecosystem. His comments push back against the growing narrative that Meta is abandoning virtual reality under pressure to prioritise AI and wearables.
Palmer Luckey breaks ranks with VR industry criticism
I have an opinion on the Meta layoffs that is contrary with most of the VR industry and much of the media, but strongly held.
This is not a disaster. They still employ the largest team working on VR by about an order of magnitude. Nobody else is even close. The “Meta is…
— Palmer Luckey (@PalmerLuckey) January 19, 2026
In a detailed post on X, Palmer Luckey said the scale and impact of the layoffs are being exaggerated. He argued that the cuts represent roughly 10% of Reality Labs and amount to normal workforce churn compressed into a short period.
“This is not a disaster,” Luckey wrote. He stressed that Meta still employs the largest VR workforce in the world, far ahead of any competitor. According to him, claims that Meta is exiting VR are “obviously false.”
Why Luckey says fewer Meta studios help VR developers
Luckey revealed that most of the eliminated roles were part of Meta’s first-party content teams. These internal studios developed games that directly competed with third-party developers on Meta’s own platforms.
He argued this created an uneven playing field. Meta-owned studios benefited from larger budgets, marketing advantages and preferred placement. Independent developers, he said, struggled to survive under that pressure. Removing this internal competition could give the broader VR ecosystem room to grow.
A complicated past with Meta and Mark Zuckerberg
Luckey’s support is notable given his history with Meta and CEO Mark Zuckerberg. He was dismissed from the company in 2017 following controversy around his political donations, a decision Meta said was unrelated. The episode remained contentious for years.
However, by 2026, Luckey and Meta had publicly reconciled. The two sides are now collaborating on military technology projects, marking a dramatic shift from their earlier fallout.
Meta reshapes Reality Labs amid financial pressure
According to a Bloomberg report, more than 1,000 employees were informed of the layoffs through an internal message from CTO Andrew Bosworth. Reality Labs employs roughly 15,000 people and has reported heavy losses for several years.
Meta is now trimming VR investments while redirecting resources toward AI-powered wearables and mobile-first experiences. The company is also expanding its smart glasses push through partnerships with EssilorLuxottica SA.