• Mark Zuckerberg plans to cut metaverse funding by up to 30% next year.
• The cuts will likely lead to layoffs as early as January 2026.
• The metaverse division has lost over $70 billion since 2021, prompting scrutiny from investors.
• Meta is shifting focus towards AI technologies, moving funds from the metaverse to AI initiatives.
• Zuckerberg has largely stopped promoting the metaverse in public statements.

Mark Zuckerberg, CEO of Meta Platforms Inc., is expected to implement substantial budget cuts for the company’s metaverse project, a vision he once considered the future of the firm. The proposed cuts, which may reach as high as 30%, come as part of Meta’s budget preparations for 2026 and will specifically impact the virtual reality group, including the products Meta Horizon Worlds and Quest VR unit. These moves may also involve layoffs, as the company navigates its financial landscape following substantial losses, according to latimes, indiatimes, and scmp.

Since the inception of its metaverse vision, Meta’s Reality Labs division has suffered losses exceeding $70 billion since 2021. Investor sentiment has shifted critically as the envisioned technology struggles to gain traction. The company indicated that the majority of the budget cuts are targeted towards the VR group that constitutes a significant portion of metaverse spending *;* decisions are influenced by the lack of expected competition within the industry. Meta executives reportedly discussed these budget reductions during meetings at Zuckerberg's Hawaiian compound, as reported by indiatimes and scmp.

In light of these challenges, Zuckerberg has shifted his focus away from the metaverse towards artificial intelligence initiatives, which he considers vital for the company's future. A company spokesperson confirmed that savings from the metaverse budget cuts would be directed towards other projects within Reality Labs, particularly those related to AI. This strategic pivot reflects a larger industry trend, as Meta aims to capitalize on the growing demand for AI technologies and smart devices, according to latimes, indiatimes, and scmp.

Analysts have suggested that shuttering metaverse projects could allow Meta to concentrate resources on more profitable ventures. Mike Proulx from Forrester has predicted significant cuts to metaverse efforts, suggesting that such a move would facilitate a greater focus on AI initiatives, including machine learning projects and AI-driven hardware. This perspective illustrates a widespread belief that the metaverse may not yield the returns originally envisioned by Zuckerberg, as evidenced by ongoing financial performance, according to latimes and scmp.