Meta is reportedly eliminating more than 1,000 roles from its Reality Labs division, the sector responsible for the company’s virtual reality (VR) and augmented reality (AR) headsets as well as software. The brand will also close or downsize several of its first-party VR/AR game studios — Armature Studio, Sanzaru Games, Twisted Pixel, and Supernatural — as part of the latest cuts. A new Bloomberg report says the latest layoffs and closures will affect around 10 percent of Reality Labs’ 15,000 employees.
Meta spokesperson Tracy Clayton spoke to The Verge, confirming the layoffs. “We said last month that we were shifting some of our investment from Metaverse toward Wearables,” Clayton explained. “This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year.”
Meta’s Reality Labs division, formerly Oculus VR, is also part of the company’s “Metaverse” endeavor. That same endeavor, however, hasn’t resonated with users quite as much as its resonated with Zuckerberg himself. The Metaverse has cost the brand about $73 billion since 2021.
Global shipments of “wearables,” a term used to describe smart accessories like the Fitbit, the Apple Watch, the Oura Ring, and Meta’s own Ray-Ban shades, are expected to surge over the next few years. Likewise, the company anticipates that its all-new Meta Ray-Ban Display Glasses, announced in September 2025, will generate more consumer fanfare than the Metaverse. The Meta Ray-Ban Display Glasses are an updated version of the brand’s 2023 Ray-Ban Meta Smart Glasses. The new iteration will run buyers about $800.
Despite everything, Meta says it will move forward with the Metaverse but will shift focus away from “fully immersive VR headsets” and toward mobile devices. The company will also continue production of its VR headsets, albeit at a reduced rate. Meta isn’t giving up its AI investments, either, surprising exactly no one.
Meta shuts down in-house VR game studios
Meta’s latest layoff targets comprise four first-party studios:
Armature Studio developed Resident Evil 4, Batman: Arkham Origins Blackgate, ReCore, and Where the Heart Leads before Meta acquired the brand in 2022. The studio was established in 2008, nearly two decades ago.
Sanzaru Games, acquired by Meta in 2020, is the studio behind Oculus Studios-developed games Asgard’s Wrath and Asgard’s Wrath 2. However, it’s perhaps best known for its Sony Interactive Entertainment (SIE) games, such as Secret Agent Clank and Sly Cooper: Thieves in Time. Sanzaru also developed SEGA releases like Sonic Boom: Shattered Crystal and Sonic Boom: Fire & Ice, both released for the Nintendo 3DS in the mid-2010s.
Meta acquired Twisted Pixel, developer of Xbox 360 titles like ‘Splosion Man, Ms. Splosion Man, and Comic Jumper, was acquired by Meta in 2021. The studio released Marvel’s Deadpool VR for Meta Quest just last year.
Supernatural, the studio behind fitness app Supernatural VR, is also reportedly shedding the bulk of its staff.
Some former employees shared news of their termination on social media platforms like Bluesky and LinkedIn. Among those is Twisted Pixel game designer Kathryn Yu. “Unfortunately, I was part of the layoffs today at Meta, and will be seeking a new role,” Yu shared with her Bluesky followers. “To my Twisted Pixel Games family: it was an honor to work alongside you for 3.5 years and ship Marvel’s Deadpool VR. We made something really special together and no one can ever take that away. ❤️”
This is a developing story. Stay tuned to Outrun Gaming for more information as it becomes available.
