Meta, the parent company of Facebook, Instagram, and WhatsApp, is preparing to reduce up to 30% of its budget allocated to its metaverse initiative, as reported by Bloomberg on Thursday, causing the tech company to rise 4% on Wall Street this morning, as reported by EFE.
The metaverse has been one of the most significant 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 over $60 billion in investment, generating criticism about the sustainability of the strategy, as reported by Bloomberg.
According to the 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 involve 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 pressures to consolidate its investments.
Nevertheless, Meta has continued to invest in AI and earlier this year launched its Superintelligence Lab by 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 aimed to strengthen Meta's position against competitors in an increasingly competitive market, where AI has become a central element.
For years, Meta heavily bet on building its parallel digital universe, and Zuckerberg even claimed that the metaverse was "the next frontier, just as social networks were when we started."