Meta stock climbs on report company will make major cuts to metaverse efforts-awdailynews

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2025-12-04

Meta stock climbs on report company will make major cuts to metaverse efforts

Meta (META) is reportedly set to make major cuts to its metaverse efforts, as the company continues to push deeper into the AI space.

CEO Mark Zuckerberg is looking to reduce the budget for the metaverse unit by as much as 30%, according to Bloomberg.

Meta stock popped more than 4% on the news.

Zuckerberg famously changed the name of his company from Facebook to Meta in 2021 as part of his full-throated support of plans for a kind of collection of interconnected virtual worlds where users would meet up, chat, work, and play as digital avatars.

It also followed a period of tumult at then-Facebook related to product and user safety.

But the metaverse concept didn’t take off. Meta’s Reality Labs segment has lost billions of dollars over the years, including $4.4 billion in its most recent quarter. It generated just $470 million in sales during the period.

Virtual reality headsets haven’t caught on among consumers as much as other tech products such as smartphones. According to IDC, the market for AR/VR headsets and display-less smart glasses is expected to grow 39.2% in 2025 to 14.3 million units. For comparison, the global smartphone market is expected to see shipments of as much as 1.25 billion units.

Instead, the AR/VR display-less smart glasses market is being primarily driven by shipments of smart glasses like Meta’s Ray-Bans, which feature built in speakers, microphones, and AI capabilities. Growth for that segment is expected to grow much as 247.5%

Meta CEO Mark Zuckerberg wears the Meta Ray-Ban Display glasses, as he delivers a speech presenting the new line of smart glasses, during the Meta Connect event at the company's headquarters in Menlo Park, California, U.S., September 17, 2025. REUTERS/Carlos Barria TPX IMAGES OF THE DAY — Meta CEO Mark Zuckerberg wears the Meta Ray-Ban Display glasses, as he delivers a speech presenting the new line of smart glasses, during the Meta Connect event at the company’s headquarters in Menlo Park, California, U.S., September 17, 2025. REUTERS/Carlos Barria TPX IMAGES OF THE DAY · REUTERS / Reuters

In September, Zuckerberg unveiled the Meta Ray-Ban Display glasses, a $799 pair of smart glasses that features a built-in display that allows you to view messages and navigate using a handful of apps. Google and Samsung are also working on their own pair of smart glasses. Apple is also reportedly developing its own pair of smart eyewear.

Zuckerberg’s order comes as Meta continues to pour money into its artificial intelligence efforts. The company is standing up or renting out data centers across the country, including its Hyperion data center, which it’s funding via a financing deal with Blue Owl.

Meta has been hiring aggressively to fulfill its AI ambitions and is looking to push further into the consumer product space, hiring away Apple’s design executive Alan Dye, according to Bloomberg’s Mark Gurman.

The company has also spent lavishly on poaching AI experts from a slew of firms including rival OpenAI.