New Delhi: Meta has begun 2026 with one of its sharpest internal resets yet. Over the past few days, more than 1,000 employees from its Reality Labs division have been laid off, triggering a flood of #OpenToWork posts across LinkedIn and long threads on X. Engineers, designers, and managers shared goodbye notes, mixed with shock and urgency, as the company confirmed a major restructuring.
This is Meta’s biggest layoff of the year so far, and it lands at a sensitive moment. Reality Labs was once the centrepiece of Mark Zuckerberg’s long-term vision for the metaverse. Now, the cuts raise an uncomfortable question. Is Meta quietly stepping away from Quest VR, Horizon Worlds, and the broader metaverse dream.
Today was a very hard day at Meta 😔. A lot of incredible and talented people I had the pleasure of working with, on my direct team and across the org, were let go, people I deeply respect and admire. This is an incredibly difficult time for our industry. If you were affected and…
— Dilmer 👓 (@Dilmerv) January 14, 2026
What exactly happened inside Reality Labs
According to Bloomberg, the layoffs began Tuesday morning after an internal post from Meta chief technology officer Andrew Bosworth. Around 10 percent of Reality Labs staff have been affected. The division employs close to 15,000 people.
Some of the most visible hits came in Meta’s VR content business. Three internal game studios, Sanzaru Games, Twisted Pixel, and Armature Studio, have been shut down. A central technical unit called Oculus Studios Central Technology has also been dissolved.
Other teams are shrinking. Ouro Interactive, formed to build experiences for Horizon Worlds, has seen staff reductions. Supernatural, the VR fitness app Meta bought in 2023 for about $400 million, has been pushed into what employees describe as “maintenance mode”, with no new content planned and only a small team retained.
I’ve had friends affected by the Meta layoffs before, but today is different– I can’t believe how many incredible people are suddenly out of work.
— Alex Coulombe (@iBrews) January 13, 2026
Why Meta is cutting jobs now
Meta says the decision ties back to a shift in priorities. “We said last month that we were shifting some of our investment from metaverse toward wearables,” a company spokesperson said. “This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year.”
Reality Labs has been a financial drag for years. Since 2021, the unit has lost more than $70 billion. Internally, Bosworth told employees that Meta is “refocusing” and that VR will now play a smaller role compared to mixed reality and AI-powered hardware.
That message is expected to be expanded in an all-hands meeting scheduled for Wednesday.
AI over the metaverse, again
The layoffs sit alongside Meta’s aggressive AI push. In June, the company reportedly spent $14.3 billion to bring in Alexandr Wang, the founder of Scale AI, to lead its AI strategy. Dozens of senior engineers followed.
Leadership changes also reflect this shift. Vishal Shah, who ran Meta’s metaverse efforts for four years, moved into the role of vice president of AI products in October. Around the same time, Meta raised its 2025 capital spending forecast to as high as $72 billion, with even heavier AI spending planned for 2026.
Meanwhile, Meta’s next mixed reality glasses project, codenamed Phoenix, has been delayed. Business Insider reported that the big reveal has been pushed from 2026 to the first half of 2027 to deliver a more “polished and reliable experience.”
Layoffs on one side, bonuses on the other
Adding to the tension, Meta is also preparing to roll out bonuses of up to 300 percent of base pay for a small group of top performers. A new review system called Checkpoint will rate employees on four levels, with only about 20 percent expected to qualify for 200 percent bonuses.
A new Meta Award could push payouts even higher for a handful of employees judged to have had an “extraordinary effect” on the business.
For many inside the company, the contrast is hard to ignore.
Meta says it is not abandoning the metaverse. Quest VR and Horizon Worlds are still alive. But the message from these layoffs is clear. In 2026, AI and wearables sit at the top of Meta’s priority list. The metaverse now has to fight for space.