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Meta, formerly known as Facebook, is stepping back from its metaverse vision — the very idea that prompted the company to rebrand — and is now shifting its focus toward artificial intelligence (AI). As part of this strategic pivot, Meta has announced the layoff of 1,500 employees.
According to The Wall Street Journal, most of those affected work in Meta’s Reality Labs division, which leads the company’s efforts in virtual and augmented reality.
While the layoffs may seem sudden, they’re actually the result of a longer-term reassessment. Meta’s metaverse ambitions have struggled to gain traction since early 2023, marked by mounting financial losses.
In 2024 alone, Reality Labs reported a $4.5 billion loss in Q2 and a $4.65 billion loss in Q4. The trend continued into 2025, with another $4.97 billion loss — even though the division generated $1.1 billion in sales.
Now, Meta is redirecting its energy toward AI, a market expected to reach $4.8 trillion by 2033. The company plans to further integrate AI into its existing hardware, including Meta Quest headsets and Ray-Ban smart glasses.
In its official statement from the Meta Reports Third Quarter 2025 Results, the company wrote: “We are at an exciting point for our company, where we have continued runway to improve our core services today as well as the opportunity to build new AI-powered experiences and services that will transform how people engage with our products in the future.”
It added, “We expect the set of investments we are making within our ads and organic engagement initiatives next year will enable us to continue to deliver strong revenue growth in 2026, while our progress on AI models and products will position us to capitalize on new revenue opportunities in the years to come.”
Last November, as reported by Reuters, Meta Platforms revealed plans to invest $600 billion over the next three years in U.S. infrastructure and jobs — much of it dedicated to building artificial intelligence data centers.
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