Meta shifts resources from metaverse to AI glasses amid budget shifts

Meta is working to step back from its shifting ambitions and redirect resources toward AI-powered glasses and wearable technology, the company told FOX Business on Thursday.

The shift comes on the heels of reports that Meta may cut up to 30% of its Metaverse portfolio, which the region’s CEO Mark Zuckerberg previously described as the future of the company.

While the tech giant did not confirm specific numbers, the company said that adjustments will be made within Reality Labs, the division responsible for augmented and virtual reality projects.

“Within our overall Reality Labs portfolio, we are shifting some of our investments from Metaverse into AI glasses and wearables given the momentum there. We are not planning any broader changes than that,” a Meta spokesperson told FOX Business.

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According to Bloomberg, the proposed 30% cuts are part of Meta’s 2026 budget planning, and cuts of that size could include layoffs as early as January.

Investors appeared to welcome the news, sending Meta shares up 4%. The increase may signal relief that the company is working to scale back a costly project, which has lost more than $60 billion, while signaling a shift toward more disciplined and strategic spending, according to Reuters.

META’s new wearables let you control screens hands-free

A Meta can cut up to 30% of its metaverse pool. (Reuters/Albert Jia/Reuters Photos)

Meta has reportedly faced challenges selling its vision of immersive transformation and expansion beyond the gaming community. Reuters added that the company saw early success with its smart glasses, which explains the company’s decision to shift resources towards the wearable technology sector.

In contrast, competitors like Google, Apple and Snap have faced challenges in turning their initial products into commercially successful offerings, the outlet added.

Oakley and Meta have unveiled the new Oakley Meta HSTN, AI-powered sunglasses. (Courtesy of Meta/Fox News)

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The announcement comes as Meta ramps up its efforts in the race toward artificial intelligence (AI), after reports of a lukewarm reception to the Llama 4 model.

Zuckerberg previously announced that the company had committed up to $65 billion in capital expenditures this year, while the broader tech industry is expected to spend nearly $400 billion on artificial intelligence in 2025, Reuters added.

FOX Business’ Breck Dumas and Reuters contributed to this report.