According to The New York Times, Meta is expected to announce the layoffs of approximately 1,500 employees in Reality Labs this week, accounting for about 10% of the department. Since rebranding and betting on the metaverse in 2020, the division has accumulated losses exceeding $70 billion, and its flagship product Horizon Worlds reportedly has fewer than 900 daily active users — Mark Zuckerberg’s metaverse dream seems to have officially failed.
(Background recap: Is Zuckerberg giving up? Meta reportedly plans to cut 30% of its metaverse budget, with layoffs possibly as early as January next year)
(Additional background: The Wall Street Journal criticizes Meta’s metaverse! Internal report: Most Horizon users “drop out within a month,” with only 200,000 monthly active users)

Table of Contents

• The $70 Billion Metaverse Gamble
• Data Speaks Louder Than Words: No One Plays the Metaverse
• From Metaverse to AI: A Major Strategic Shift
• Is the Metaverse Boom Over?

According to The New York Times, Meta plans to lay off about 1,500 employees from its Reality Labs division this week, representing roughly 10% of the 15,000 employees in the department. The announcement could be made as early as Tuesday.

Reality Labs is Meta’s core division responsible for developing VR headsets and metaverse platforms such as Horizon Worlds and Horizon Workrooms. The savings from layoffs will be redirected toward AI development and wearable devices, including smart glasses and Meta Neural Band.

The $70 Billion Metaverse Gamble

Since August 2020, Meta’s cumulative losses in Reality Labs have exceeded $70 billion. Just in Q3 2025, the division reported an operating loss of $4.4 billion.

Last December, reports emerged that Meta might cut its metaverse budget by as much as 30%. Now, the layoffs confirm that Zuckerberg’s metaverse dream is being forced to scale back.

Data Speaks Louder Than Words: No One Plays the Metaverse

The poor performance of Meta’s flagship metaverse product Horizon Worlds perhaps best illustrates this round of layoffs.

According to reports, Horizon Worlds has fewer than 900 daily active users. In comparison, even the blockchain metaverse platform The Sandbox, often considered “no longer popular,” has 776 active wallets within 30 days.

When you burn through $70 billion but can’t even retain 1,000 daily active users, it’s not a strategy problem — it’s that the product simply has no market demand.

From Metaverse to AI: A Major Strategic Shift

This round of layoffs indicates that Meta is accelerating its strategic pivot from the metaverse to AI.

Zuckerberg renamed Facebook to Meta in 2021, loudly proclaiming “the metaverse is the company’s future,” and even expressed willingness to endure decades of losses to get ahead in the space. However, after four years, the promised “1 billion users” target remains distant, while the AI wave sparked by ChatGPT has stolen all the spotlight.

Now, Meta is betting on AI and wearable devices, trying to regain dominance in the new wave of technological competition.

Is the Metaverse Boom Over?

Meta’s predicament is not unique. According to DappRadar data, the user metrics across the entire metaverse sector are quite bleak:

– Decentraland has only 38 daily active users (though this figure is disputed by official sources)
– The Sandbox has about 522 daily active users
– Horizon Worlds has fewer than 900 daily active users

Compared to mainstream gaming platforms like Roblox and Fortnite, which boast tens of millions of users, these numbers are worlds apart.

Burning through $70 billion, is the metaverse dream over? At least for Meta, it’s time to face reality.