Meta’s Reality Labs division continues to bleed cash, with the company revealing that its virtual reality unit lost $19.1 billion in 2025, even as it moves ahead with major layoffs and a strategic shift toward AI.
Earlier this month, Meta cut around 10% of Reality Labs staff, affecting more than 1,000 employees, as part of efforts to rein in costs. The latest earnings report showed that losses at the unit were slightly higher than in 2024, when Reality Labs posted a $17.7 billion deficit. In the fourth quarter alone, the division lost $6.2 billion, despite generating just $955 million in revenue. Total sales for the year reached about $2.2 billion.
During the earnings call, CEO Mark Zuckerberg acknowledged the scale of the losses but struck an optimistic tone, saying Meta is now directing most of its investment toward smart glasses, wearables, and mobile experiences. However, he warned that losses in 2026 are expected to remain at similar levels.
Reality Labs was once the centerpiece of Meta’s ambitious push into the metaverse, but public skepticism has persisted since the company rebranded in 2021. As the VR business struggles to gain traction, Meta has increasingly pivoted away from immersive virtual worlds and toward artificial intelligence.
In recent weeks, the company has also shut down several VR studios and retired products like its Workrooms app, which was designed for virtual meetings. At the same time, Meta is ramping up investment in AI labs and smart glasses, signaling a broader shift in priorities as it seeks more commercially viable growth areas.