Meta Restructures Reality Labs: Layoffs and New Hires Signal Shift in VR Strategy

Meta has recently made significant changes within Reality Labs, its hardware and virtual reality (VR) division, by laying off an undisclosed number of employees. The layoff primarily affects Oculus Studios, the company’s in-house gaming division for Quest headsets, and the team behind Supernatural, a VR fitness app acquired by Meta for over $400 million. A Meta spokesperson confirmed the restructuring, indicating that some teams within Oculus Studios are experiencing shifts in structure and roles, leading to a reduction in team size. Despite the layoffs, the company remains committed to investing in mixed reality experiences, including fitness and games. The Supernatural team also acknowledged the changes on Facebook, noting that subscribers will see fewer weekly workouts. These recent cuts follow a larger reduction earlier this year. In January, Meta announced it would eliminate nearly 4,000 roles across the company, driven by CEO Mark Zuckerberg’s initiative to “raise the bar on performance.” According to documents obtained by Business Insider, the performance-based layoffs impacted at least 560 employees from Meta’s Reality Labs, with nearly half of those coming from the Horizon team. Meta CTO and Reality Labs chief Andrew Bosworth emphasized in an internal memo that 2025 is a critical year for the division. He stated that the success of Horizon Worlds on mobile devices is essential for the company's long-term metaverse aspirations to avoid being labeled a misadventure. In addition to the restructuring and layoffs, Meta has taken steps to refocus and streamline its Reality Labs operations. In January, the company reorganized its leadership, with COO Javier Olivan now overseeing the team previously managed by former Reality Labs COO Dan Reed. Other Reality Labs leaders now report to top executives in Meta’s main business units, suggesting a more integrated approach to driving innovation and achieving its strategic goals. Despite the reductions, Meta continues to actively recruit additional talent. As of the latest update, the company had 495 open roles listed on its careers site for Reality Labs. Meta is offering affected employees the opportunity to interview for these and other internal positions. An internal email to one of the affected employees stated that those who do not find another role at Meta by May 23, 2025, will face termination. The Verge first reported on these layoffs, highlighting the ongoing challenges and strategic realignments within the division. Industry insiders have mixed reactions to these changes. Some see the layoffs as a necessary step to streamline operations and improve efficiency, given the high costs associated with developing cutting-edge VR technology. Others express concern over the potential loss of valuable expertise and the impact on VR content development. However, many agree that the success of Horizon Worlds on mobile could be a make-or-break moment for Meta’s metaverse ambitions. The company’s continued commitment to hiring and reorganizing leadership demonstrates a belief in the long-term potential of virtual and mixed reality technologies, even as it navigates short-term financial constraints and operational challenges. Meta, founded as Facebook in 2004, has transformed significantly under Mark Zuckerberg’s leadership. The company’s shift towards the metaverse represents a bold move into the future of digital interaction, aiming to create immersive and interconnected virtual worlds. Reality Labs, established to lead this effort, has faced numerous obstacles but also seen promising advancements, particularly with the Quest 2 and Quest 3 headsets. The current restructuring is seen as a crucial phase in Meta’s journey to establish itself as a leader in the VR and AR space, balancing innovation with fiscal responsibility.