Meta cuts Reality Labs jobs to shift more spending to AI

In short: Meta is cutting jobs, mainly in its Reality Labs unit, to move money from metaverse projects to AI and AI-powered wearables.

What happened

Meta, the company behind Facebook and Instagram, has made layoffs in early 2026 as part of a plan to put more resources into artificial intelligence, or AI (computer systems that can generate text, images, or decisions).

The company has said it is shifting investment away from its metaverse division and toward wearables and AI-powered technology. Wearables are devices you can wear, like smart glasses.

TechCrunch reports that Meta cut about 1,500 jobs in Reality Labs in January 2026, which is about 10% of that division. It also cut 102 positions at offices on the San Francisco Peninsula. Reality Labs has been a major money-loser for Meta, with more than $70 billion in losses since 2021, including a $4.4 billion loss in one quarter.

Meta CEO Mark Zuckerberg has also said the company plans to invest $115 billion or more in AI “tooling,” meaning the computers, chips, and software needed to build and run AI (like building a bigger power grid so more homes can turn on the lights). He has argued that AI can let one person do work that used to take a whole team.

Why it matters

This is another sign that big tech companies are reorganizing around AI, even when it means fewer jobs in certain teams. Meta is also pointing to growth areas like AI-powered smart glasses, where it says Ray-Ban Meta sales have tripled year over year.

Source: TechCrunch AI