Meta layoffs clear the way for a bigger push into smart glasses

• Meta’s Reality Labs layoffs and VR closures come as smart glasses rise.
• The metaverse remains, but focus is shifting away from VR.

Meta’s pullback from virtual reality is not subtle. Roughly one in ten employees in its Reality Labs division are losing their jobs, and several VR game studios owned by the company are being shut down altogether. The move reflects a broader shift away from the metaverse effort that once sat at the centre of Meta’s long-term plans.

According to an internal memo seen by Bloombergthe cuts include the closure of three internal studios: Twisted Pixel Games, Sanzaru Games, and Armature Studio. The teams worked on some of Meta’s most recognisable VR titles, including Marvel’s Deadpool VRthe Asgard’s Wrath series, and the VR version of Resident Evil 4. Meta spokesperson Tracy Clayton confirmed the details to The Vergesaying Bloomberg’s reporting was accurate.

The layoffs also affect Meta’s VR fitness offering. The team behind Supernatural will not create new features or content, although the app itself will continue to be supported. Meta acquired Supernatural developer In in 2023 after a legal challenge from the US Federal Trade Commission. Twisted Pixel and Armature joined Meta in 2022, while Sanzaru was acquired earlier, in 2020.

Meta layoffs shut down VR studios

Former employees began sharing news of the closures shortly after the memo circulated.

“I’ve just been laid off. It appears the entire Twisted Pixel Games studio has been shut down along with Sanzaru and Armature too,” former Twisted Pixel level designer Andy Gentile wrote.

“Unfortunately, Twisted Pixel Games has been closed as a result of strategy changes at Meta,” former Twisted Pixel senior artist Dan Greenfield said.

“As many will hear soon, several Meta game studios were closed today, including Sanzaru,” former Sanzaru senior level designer Ray West posted.

“Due to an unexpected closure of Sanzaru Studios, I’m open for work,” former Sanzaru lead environment artist Tyler Fluharty said.

This is not the first time Meta has shut down a VR studio it previously bought. In 2024, the company closed Ready at Dawn, the developer behind Echo VRwhich Meta had also acquired in 2020. Taken together, the closures point to a steady narrowing of Meta’s ambitions for high-end VR gaming.

Wearables gain ground as Meta layoffs hit VR

Clayton tied the latest layoffs to a broader change in spending priorities. “We said last month that we were shifting some of our investment from Metaverse toward Wearables,” she told The Verge. “This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year.”

Reality Labs is responsible for Meta’s extended reality products, including Quest headsets, VR software, and experimental hardware. The division has posted multi-billion-dollar losses year after year, even as Meta continued to fund it heavily. Investor pressure has grown as those losses persisted, especially while VR adoption remained slower than expected.

At the same time, Meta’s smart glasses have gained more attention than its VR headsets. The company’s Ray-Ban smart glasses, which combine audio, cameras, and AI features, have become one of Meta’s more visible hardware successes. Last year’s launch of the Meta Ray-Ban Display further pushed wearables into the spotlight.

Bloomberg reported that Meta may double production capacity for its AI-enabled smart glasses by the end of 2026 to meet growing demand. That demand helps explain why wearables are now receiving more funding, while VR studios and content teams are being trimmed back.

A quieter reset, not a full exit

The shift also reflects changes in how people interact with immersive tech. While VR headsets still appeal to dedicated users, they remain bulky, expensive, and tied to specific use cases like gaming or fitness. Smart glasses, by contrast, fit more easily into daily routines and align more closely with Meta’s push into AI assistants and on-device computing.

Still, Meta is not walking away from the metaverse idea entirely. According to Bloomberga memo from Meta chief technology officer Andrew Bosworth outlines a change in direction not a full retreat. The metaverse, as Meta now sees it, will not be built mainly around VR social spaces. Instead, future efforts will focus more on mobile devices and lighter experiences that do not require a headset.

Such re-framing suggests Meta is trying to keep parts of its long-term vision alive while adjusting to market reality. VR gaming studios, which require large teams and long development cycles, appear to be among the first areas cut as the company looks for faster returns and broader reach.

For the developers affected, the strategy shift offers little comfort. Years after Meta’s aggressive push to buy VR studios and build exclusive content, many of those teams now find themselves out of work as priorities change again. The closures serve as another sign that Meta’s vision for the metaverse is still very much in flux.

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