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Four Years After Renaming Facebook to Meta and Betting on Virtual Reality, Zuckerberg Faces Pressure for Results, Prepares Spending Cuts, and Tries to Reposition the Company with Artificial Intelligence and Smart Glasses.
Meta, owner of Facebook, Instagram, and WhatsApp, is considering cutting up to 30% of its metaverse division budget in 2026, in an attempt to rein in a project that has already accumulated over US$ 70 billion in losses since the beginning of 2021. This possibility includes layoffs starting in January 2026, according to reports published in the first half of December.
The discussion marks a sensitive point for Mark Zuckerberg: the metaverse was announced as the major bet for the future, with the promise of migrating interactions from mobile phones to immersive experiences in virtual reality and augmented reality. In practice, the progress has fallen short of expectations, and losses have mounted quarter after quarter.
At the same time, the company is trying to show the market that it has learned from the era of “spend first and explain later.” After the news of cuts, shares reacted positively on December 4, 2025, a movement interpreted as a sign of relief from some investors.
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The most visible repositioning is the growing focus on artificial intelligence, both for products and for advertising efficiency. Meta is also targeting “wearable” devices as an intermediate path between social networks and next-generation computing.
From Facebook to Meta: Why the Metaverse Became a Priority in 2021
In 2021, Facebook adopted the name Meta and reorganized its public narrative around the metaverse. The change was not just aesthetic: it signaled that the company intended to lead the next computing platform, with virtual environments, avatars, and 3D meetings.
The bet focused on the Reality Labs division, responsible for virtual and augmented reality hardware and software. This is where the Meta Quest (formerly Oculus) headsets and services like Horizon Worlds, a social space in virtual reality, come in.
The proposal was ambitious but required two difficult things at once: create a new “ecosystem” of content and convince millions of people to use a device that is still expensive and impractical in daily life.
Reality Labs in the Red: The Numbers That Explain the Pressure for Cuts
In its financial reports, Meta separates operations into “Family of Apps” (social networks and advertising) and “Reality Labs” (metaverse and devices). It is in this second area that losses are accumulating.
In the Q3 2025 balance sheet, Reality Labs recorded an operating loss of US$ 4.432 billion for the quarter. In the accumulated first nine months of 2025, the operating loss totaled US$ 13.171 billion, according to the company’s official results announcement.
When combined with previous years, these results help explain why market sources describe the effort as one of the most expensive in the technology industry. Reports indicate that the division has already surpassed US$ 70 billion in losses since 2021, a figure that has become a reference when the topic makes the news.
Part of the problem is product-related. Even with improvements, the metaverse is still seen as something niche, without a strong enough “reason” to replace smartphones, whether for socializing, working, or consuming entertainment.
Another part is related to experience. There are recurring criticisms about usability, lack of “must-have content,” and difficulties in retaining users, which makes it harder to justify increasing expenses for a long time.
Layoffs and Budget Reduction: What May Change in 2026
According to Reuters, based on information attributed to Bloomberg, Meta is discussing a reduction of up to 30% in the metaverse budget as part of its annual planning for 2026. The design includes the possibility of layoffs as early as January 2026, if the cuts are approved and implemented.
The debate occurs at a time when the company, in addition to the metaverse, is also increasing investments in other costly areas, such as infrastructure and AI talent. This raises the pressure for tougher choices, prioritizing areas that bring more predictable returns.
A clue regarding the new tone appeared in internal communications reported by the press: executives are discussing raising prices on virtual reality devices and seeking a more sustainable business model, in addition to slowing the cadence of hardware releases.
This kind of movement suggests that the metaverse has not necessarily “ended,” but may enter a more pragmatic phase, with fewer simultaneous bets and shorter efficiency goals.
AI and Smart Glasses: Meta Tries to Change the Narrative Without Abandoning the Dream
As the metaverse loses its place as the central promise, artificial intelligence is advancing as a priority. Meta is already using AI for content and ad recommendations and is trying to expand this with new models and products, aiming to improve engagement and commercial performance.
In hardware, the more “palatable” focus for the public has been the Ray-Ban Meta smart glasses. Reuters reported that smart glasses sales tripled in 2025, but the product is still treated as a niche gadget, with barriers such as price, comfort, and privacy concerns.
Zuckerberg has also started to disclose more numbers about the device. In an internal meeting, he stated that Meta sold over 1 million units of the Ray-Ban glasses in 2024, according to The Verge.
The relationship with the Ray-Ban manufacturer also appears to be more strategic. Reuters reported that Meta would have at least a 3% stake in EssilorLuxottica amid the deepening partnership in wearables with AI.
The logic is clear: if the headset has not yet become “the new smartphone,” glasses may be an intermediate step. And, in the short term, AI reinforces the engine that is already paying the company’s bills: advertising on social networks.
What Changes for the Brazilian Public and the Market
For Brazil, the direct impact is not a “shutdown of Facebook,” but rather how Meta will choose where to put money and attention. A leaner metaverse may mean fewer quick innovations in Horizon Worlds and social experiences in VR.
On the other hand, a greater focus on AI and wearables is likely to accelerate changes in Instagram, Facebook, and WhatsApp, with more automation, recommendations, intelligent features, and also debates about privacy and transparency.
In the end, the question remains whether the metaverse will be remembered as a long-term vision that just needed time or as the most expensive example of a big tech trying to “force” a new platform before the public was ready.
And you, do you think the metaverse will still become a reality for everyone, or was it a billion-dollar mistake by Zuckerberg that should be shut down for good? Comment on what you expect from Meta in 2026 and whether the company should prioritize AI, smart glasses, or insist on virtual reality.
VR is great! It just needs a killer app at a cheaper price..
Revert to wat works for u mark….recovery mode may cost u all. Look at blackberry n learn
Huh…. Do you really think that your AI will actually save you? At first it’s good for the greedy and soon it will ruin your business and your life. 😁