Hajra Naz
Earlier this month, Meta cut roughly 10% of the staff at Reality Labs, its virtual and augmented reality division, eliminating as many as 1,000 roles. Now the company’s latest earnings report helps explain why.
According to Meta’s results released Wednesday, Reality Labs lost $19.1 billion in 2025, surpassing its losses from the year before. In 2024, the unit posted losses of about $17.7 billion. The fourth quarter alone accounted for $6.2 billion in losses.
Those losses stand in sharp contrast to Reality Labs’ revenue. The division generated $955 million in Q4 and about $2.2 billion across all of 2025, leaving a massive gap between spending and sales.
Despite the numbers, Meta CEO Mark Zuckerberg struck an optimistic tone during the company’s earnings call while also acknowledging that the pain isn’t over. He said the company is now directing most of its investment toward glasses and wearable devices while pushing to make Horizon more successful on mobile and eventually turn VR into a profitable ecosystem.
Still, Zuckerberg made it clear that losses will continue. “I expect Reality Labs losses this year to be similar to last year,” he said, adding that 2026 will likely mark the peak, after which Meta hopes to gradually reduce its losses.
Meta’s massive bet on the metaverse, announced in 2021, was met with widespread skepticism from the start. In its early days, the effort drew intense criticism, with some commentators even labeling the company an “international laughingstock.”
Nearly five years later, that skepticism has not faded. As Reality Labs continues to burn cash and Meta increasingly pivots toward artificial intelligence, questions remain about what, if anything, can turn the VR business around.
Signs of retrenchment are already visible. CNBC reported last week that Meta plans to shut down several of its VR studios, in addition to the recent layoffs. The company has also announced plans to retire its standalone Workrooms app, which was once pitched as a virtual office environment for remote work.
Taken together, the moves suggest a company reassessing how much longer it’s willing to bankroll a vision that has yet to pay off—and whether VR still deserves center stage inside Meta at all.
