Meta to Cut Up to 30% of Metaverse Budget — Bloomberg Report Dec 2025

Meta Plans Up to 30% Cut in Metaverse Budget, Bloomberg Reports

On 4 December 2025, reports surfaced that Meta Platforms Inc. is planning to cut up to 30% of its Metaverse budget as part of its 2026 financial planning. The announcement, expected to be formalized soon, marks a significant shift in the company’s investment strategy for its virtual reality (VR) and augmented reality (AR) projects.

Meta’s Reality Labs division, which includes the Horizon Worlds VR platform and Meta Quest devices, has seen billions of dollars in investment since 2020, with total spending exceeding $60 billion.

However, this massive investment has yet to generate proportional profits. The company is reviewing its 2025–26 budget to prioritize resources, and the potential budget cut for Metaverse projects is aimed at reallocating funds to more profitable and strategic areas, including artificial intelligence (AI), data centers, and cloud services.

Following news of the potential cut, Meta shares reacted positively, rising approximately 4–6% in early trading. Investors welcomed the move, seeing it as a step toward controlling costs and improving financial sustainability after years of heavy spending and net losses.

Meta’s current focus on AI also supports this decision. The company has heavily invested in AI infrastructure and data centers in 2025, signaling a strategic pivot toward artificial intelligence over VR/AR technology.

The budget reduction may also lead to layoffs within the Reality Labs division, with Bloomberg reporting potential staffing cuts expected by January 2026.

This change not only affects Meta’s financial planning but also signals a strategic shift: the company is reducing its emphasis on virtual reality projects while investing more in AI and cloud computing initiatives.

Although some users and developers may view the budget cut as a setback for the Metaverse vision, analysts see it as a positive step toward financial sustainability. By reallocating resources to higher-impact areas, Meta aims to balance long-term growth with short-term profitability.