Earlier this month, Meta reportedly laid off 10% of the staff at its virtual reality division, Reality Labs, cutting up to 1,000 employees. Now, in a development that appears to be directly related, the company revealed that the division lost billions of dollars last year.
Meta’s earnings report on Wednesday showed the struggling virtual reality business lost about $19.1 billion in 2025, slightly more than its 2024 loss (losses for that year hovered around $17.7 billion). The division posted a loss of $6.2 billion in the fourth quarter, according to the report.
These losses are comparable to the revenue generated by the division: $955 million in the fourth quarter and approximately $2.2 billion through 2025.
During the company’s earnings call on Wednesday, Mark Zuckerberg struck an optimistic tone for the company’s VR team, even though he expected losses to be about the same in 2026.
“At Reality Labs, we will now direct the majority of our investment to glasses and wearables, while focusing on making Horizon a huge success on mobile and making VR a profitable ecosystem over the next few years,” Zuckerberg said on the conference call. But the CEO said losses are expected to continue. “We expect Reality Labs’ losses this year to be about the same as last year,” Zuckerberg said, but added, “As we start to gradually reduce our losses, this year will probably be the peak.”
When Meta announced its pivot to the “Metaverse” in 2021, the move was met with some skepticism, and during the first year of its VR efforts, the company faced harsh criticism and was even dubbed an “international laughing stock.” Nearly five years later, that skepticism still hasn’t completely subsided. The VR business continues to be in the red, and while Meta continues to aggressively pivot from VR to AI, it’s unclear what exactly will turn around this sluggish business.
CNBC reported last week that in addition to layoffs, Meta plans to close many of its VR studios, another sign of the company’s waning interest in VR. The company recently announced that it is discontinuing its standalone Workrooms app. The company was pitching the app to office workers as a VR space they could use to hold meetings.
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