Zuckerberg Cuts Metaverse Spend After $70 Billion Losses

Meta Platforms Inc., under the leadership of Mark Zuckerberg, has acknowledged that its once-bold bet on the “metaverse” is not playing out as envisioned, prompting a sweeping pivot in strategy. The company is reportedly preparing to slash the budget of its metaverse-focused division, Reality Labs, by as much as 30 percent.

Key Highlights

• Meta Platforms plans to cut its metaverse budget by up to 30 percent after massive losses.
• The company’s metaverse arm, Reality Labs, has incurred losses of more than US $70 billion since 2021.

Since the rebranding from Facebook Inc. to Meta in 2021, the company invested tens of billions of dollars into virtual reality (VR) headsets, augmented reality (AR) devices, and the digital worlds promised under the metaverse banner. But these ambitious efforts have yet to achieve meaningful commercial traction. Reality Labs alone has accumulated losses exceeding $70 billion since 2021.

The high cost of building hardware, creating immersive content, and attracting sufficient user adoption has weighed heavily. As a result, the metaverse project is being labelled by analysts as a “vision-too-far” — a moment in which financial and strategic reality collided with hype.

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In response, Meta is shifting its focus toward artificial intelligence (AI) and wearable technologies, where it sees more immediate prospects for growth and monetisation. The reallocation of resources is intended to improve financial discipline and reassure investors, who have responded positively to the news — Meta’s shares rose in the wake of the budget-cut reports.

Commentators say this marks a turning point: the metaverse dream may still lie in the future, but Meta is choosing to cut its losses and redirect energy toward more tangible near-term opportunities. In the words of one analyst: “Smart move, just late.”