Meta’s Reality Labs division is at a crossroads as Chief Technology Officer Andrew Bosworth has called what he describes as the “most important” all-hands meeting of the year for January 14, 2025. In an unusual move, Bosworth is strongly urging Reality Labs employees to attend in person, with some managers instructing staff to “drop what they’re doing” to be present, according to two Meta employees who spoke with Business Insider.
The meeting comes at a pivotal moment for Reality Labs, Meta’s division responsible for wearables, virtual reality, augmented reality initiatives, and a nascent robotics unit. Despite some successes like the Ray-Ban smart glasses, Reality Labs has been hemorrhaging money, accumulating losses exceeding $70 billion since 2020. The division has endured multiple rounds of cuts over the past year, including potential budget reductions of up to 30% and significant job cuts reported in December 2024.
Meta’s strategic pivot toward AI has dramatically shifted resources away from the metaverse vision. In 2025, CEO Mark Zuckerberg redirected the company’s focus, making a massive $14.3 billion investment in Scale AI and hiring its CEO, Alexandr Wang, as part of a major reset of Meta’s AI efforts. The company subsequently launched a multibillion-dollar hiring spree, recruiting top AI researchers and engineers from competitors including OpenAI and Google DeepMind.
Reality Labs has faced brutal restructuring throughout the past year. In April 2024, Meta laid off employees from Oculus Studios, its in-house gaming division, and the team behind Supernatural, a VR fitness app Meta acquired for over $400 million. These cuts followed broader January 2025 layoffs that eliminated nearly 4,000 roles companywide, with at least 560 positions affecting Reality Labs employees specifically.
In a memo obtained by Business Insider earlier last year, Bosworth characterized 2025 as “the most critical” year in his eight-year tenure at Reality Labs, writing: “This year likely determines whether this entire effort will go down as the work of visionaries or a legendary misadventure.” The upcoming all-hands meeting may reveal the division’s fate as Meta continues prioritizing AI investments over its metaverse ambitions.
Key Quotes
This year likely determines whether this entire effort will go down as the work of visionaries or a legendary misadventure.
Andrew Bosworth, Meta’s CTO and head of Reality Labs, wrote this in a memo describing 2025 as the most critical year in his eight-year tenure. The statement reveals the existential stakes facing the division as it has accumulated over $70 billion in losses while Meta pivots toward AI investments.
drop what they’re doing
According to a Meta employee, some managers have instructed Reality Labs staff to attend the January 14 all-hands meeting in person using this urgent language. The unusual emphasis on mandatory in-person attendance suggests major announcements are forthcoming about the division’s future.
Our Take
Meta’s situation perfectly encapsulates the AI gold rush mentality currently dominating Silicon Valley. The company is essentially conducting a live experiment in strategic pivoting, abandoning a $70 billion investment in the metaverse to chase AI opportunities. This isn’t just about cutting losses—it’s about survival in an AI-first world where companies fear being left behind more than they fear sunk costs.
The $14.3 billion Scale AI investment and aggressive poaching of AI talent from OpenAI and DeepMind reveal Meta’s desperation to compete in the AI arms race. Reality Labs’ fate serves as a cautionary tale: even visionary bets backed by enormous resources can become expendable when the next transformative technology emerges. The January 14 meeting will likely determine whether Meta doubles down on a scaled-back VR/AR vision or effectively declares the metaverse experiment over, redirecting remaining resources to AI development where the company sees its competitive future.
Why This Matters
This story represents a critical inflection point in Big Tech’s strategic priorities, illustrating how the AI boom is forcing companies to make difficult choices about resource allocation. Meta’s dramatic shift from metaverse investments to AI development reflects broader industry trends where artificial intelligence has become the dominant technology focus, eclipsing other ambitious projects.
The potential restructuring or downsizing of Reality Labs has significant implications for thousands of workers in the VR/AR industry and signals that even well-funded moonshot projects can be sacrificed when AI opportunities emerge. With over $70 billion in losses, Meta’s Reality Labs represents one of the most expensive corporate bets in tech history, and its potential failure or dramatic scaling back would mark a major strategic retreat.
For the AI industry, Meta’s $14.3 billion investment in Scale AI and aggressive talent acquisition from OpenAI and Google DeepMind demonstrates the intense competition for AI resources and expertise. This reallocation of capital and human resources from VR/AR to AI development will likely accelerate Meta’s AI capabilities while potentially setting back the broader metaverse ecosystem, affecting competitors and partners who bet on that vision.
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Source: https://www.businessinsider.com/meta-cto-andrew-bosworth-reality-labs-all-hands-meeting-2026-1