Meta plans 30% cuts for its metaverse, according to Bloomberg, and rises 4% in the stock market

Meta, the parent company of Facebook, Instagram and WhatsApp, is preparing to reduce its budget for its metaverse initiative by up to 30%, Bloomberg reported this Thursday, causing the tech company to rise 4% on Wall Street this morning.

The metaverse has been one of the most important bets of the company’s CEO, Mark Zuckerberg, who changed the company’s name from Facebook to Meta in 2021 to reflect its focus on augmented and virtual reality.

Since 2020, the metaverse unit has consumed more than $60 billion in investment, generating criticism about the sustainability of the strategy, according to Bloomberg.

According to that media outlet, the budget cuts are part of Meta’s annual planning for 2026 and were discussed during a series of meetings held at Zuckerberg’s residence in Hawaii last month.

The magnitude of the adjustment – up to a third of the metaverse budget – could imply layoffs during the first quarter of 2026, it adds.

The announcement comes as Meta seeks to stay relevant in the race for artificial intelligence (AI), amid criticism of its Llama 4 model and pressure to consolidate its investments.

However, Meta has continued to invest in AI and earlier this year launched its Superintelligence Lab, incorporating Alexandr Wang, CEO of Scale AI, as part of a $14.3 billion investment that gave the company a 49% stake in the startup.

This move sought to strengthen Meta’s position against competitors in an increasingly competitive market, where AI has become a central element.

For years, Meta bet heavily on building its parallel digital universe and Zuckerberg went so far as to say that the metaverse was “the next frontier, just as social networks were when we started.”