Meta Shifts Focus from Metaverse to AI, Stock Rises 5% on Budget Cuts
Meta's stock surged over 5% following revelations of planned budget reductions targeting its metaverse division. Internal discussions at Mark Zuckerberg's Hawaii estate last month yielded directives for company-wide cost-cutting, with the metaverse team facing disproportionate cuts of up to 30%.
The austerity measures will impact Horizon Worlds and Quest VR units—the cornerstone of Meta's VIRTUAL reality ambitions since rebranding from Facebook in 2021. These platforms, envisioned as future hubs for human interaction and commerce, have failed to achieve meaningful adoption.
Resources are being reallocated toward AI-centric hardware projects, including smart Ray-Ban glasses and wearables under Reality Labs. The division has accumulated over $70 billion in losses since 2021, prompting stricter fiscal discipline than the standard 10% cuts applied elsewhere.
