Dan Reed, the Chief Operating Officer of Meta's Reality Labs, is stepping down after nearly 11 years with the company. Reed announced his decision on LinkedIn, expressing gratitude for the opportunity to build what he termed a "fast-growing, multibillion-dollar consumer technology business" encompassing areas like AI wearables, augmented and mixed reality, and the metaverse. He indicated that he plans to take an extended break to spend time with his family before returning to the tech sector to lead and grow a new venture. Reed's departure comes at a pivotal moment for Reality Labs, which is undergoing significant restructuring and facing increasing internal and external pressures. In January, Business Insider reported that Meta began integrating Reality Labs more closely with its core business, reversing aspects of Mark Zuckerberg’s 2021 reorganization that had set the division apart as a stand-alone, metaverse-focused entity. Under the new structure, teams responsible for sales, marketing, and analytics that previously reported to Reed now fall under broader Meta leadership, led by COO Javier Olivan. Other key Reality Labs leaders, such as CMO Alex Schultz and Head of Partnerships Justin Osofsky, have also been realigned with top company executives. Andrew Bosworth, Meta’s Chief Technology Officer, acknowledged Reed's contribution to the rapid growth of Reality Labs. According to an internal memo reviewed by Business Insider, Reality Labs saw over a 40% increase in sales year-over-year in 2024, exceeding nearly all of its aggressive sales and user targets. Bosworth attributed much of this success to Reed's leadership. However, despite these achievements, Reality Labs remains a significant financial burden for Meta. Since 2020, the division, which includes products like the Quest headsets, Horizon Worlds, and Meta's Ray-Ban smart glasses, has accumulated over $60 billion in losses. Last month, Meta initiated layoffs within Reality Labs, affecting teams working on VR gaming and the Supernatural fitness app. These cuts highlight the company's efforts to streamline operations and cut costs amid ongoing challenges. Internally, Bosworth has labeled 2025 as the "most critical" year for the division, suggesting that the success or failure of Meta’s ambitious metaverse ventures will largely determine whether the substantial investments pay off or are seen as a costly misadventure. Reed's initial role at Meta in 2014 involved leading the company's partnerships with sports teams and athletes, leveraging his background as a former NBA executive. Over the years, his responsibilities expanded, aligning with the growing importance of the metaverse and AR/VR technologies within the company. His tenure oversaw the development and launch of several innovative products, but the financial strain remains a contentious issue. Industry insiders view Reed's departure as a reflection of the broader challenges and shifts within the tech landscape. While Meta continues to invest heavily in the metaverse and related technologies, the integration of Reality Labs with its core business signals a more cautious approach to these ventures. This move is seen as a strategic response to maintain financial stability while still pursuing long-term technological advancements. Reed’s experience and leadership will likely be missed, but the restructuring aims to create a more unified and efficient organization capable of addressing the market dynamics and achieving sustainable growth. Meta, known for its social media platforms Facebook, Instagram, and WhatsApp, has positioned itself as a leader in the evolving tech ecosystem. The company's focus on the metaverse is part of a broader strategy to transition from traditional social media to immersive digital experiences, driven by CEO Mark Zuckerberg’s vision for the future of human interaction in the digital realm. Despite the setbacks, Meta remains committed to this vision, with ongoing investments and a reorganization aimed at optimizing the structure of Reality Labs to align with the company’s goals.