Earlier this month, Meta laid off 10% of the staff for Reality Labs, its virtual reality unit, reportedly cutting as many as 1,000 employees. Now, in a development that seems directly related, the company has revealed that the unit lost many billions of dollars last year.
On Wednesday, Meta’s earnings report showed that its embattled virtual reality business lost approximately $19.1 billion in 2025. This figure is slightly more than the $17.7 billion it lost in 2024. In the fourth quarter alone, the unit posted a loss of $6.2 billion.
These substantial losses stood in stark contrast to the unit’s sales, which were $955 million in the fourth quarter and about $2.2 billion for the full year of 2025.
During the company’s earnings call, Mark Zuckerberg struck a tone of optimism for his company’s VR team while noting that losses in 2026 are expected to be very similar. He stated that investment is being directed toward glasses and wearables, with a focus on making Horizon a success on mobile and building a profitable VR ecosystem in the coming years.
However, the CEO acknowledged that losses were expected to continue. Zuckerberg said he expects Reality Labs losses this year to be similar to last year, but noted that this year would likely be the peak before the company starts to gradually reduce losses going forward.
When Meta announced a pivot toward the “metaverse” in 2021, the move was met with skepticism. During its first year of VR efforts, the company faced harsh criticism and was even referred to as an international laughingstock. Nearly half a decade later, that skepticism has not exactly subsided.
As the VR business continues to lose money and Meta aggressively pivots away from VR and toward AI, it is unclear what will turn the ailing business around.
Last week, a report indicated that, in addition to the layoffs, Meta plans to shutter a number of its VR studios. This is another sign that the company’s interest in virtual reality is waning. The company also recently announced it would retire its standalone Workrooms app, which had been pitched to office workers as a VR space for holding meetings.