Meta Cuts 1,500 Metaverse Jobs, Redirects Spending to AI Glasses
Meta Platforms cut 1,500 jobs in its Metaverse division, representing 10% of that unit’s staff, as the company reallocates spending to AI glasses and other wearable devices. The reduction streamlines operations and refocuses resources on high-growth AI hardware initiatives.
1. Pivot Strategy and Major Job Cuts
Meta Platforms has accelerated its strategic shift away from its metaverse ambitions, announcing the elimination of 1,500 positions—roughly 10% of its metaverse division workforce—to reallocate resources toward its AI glasses and other wearable products. This move comes just over four years after rebranding from Facebook to Meta to underscore its metaverse vision. The company has indicated that it will redeploy capital and talent from virtual‐reality projects into development of mixed‐reality hardware, AI research and tooling, and short‐form video enhancements across Instagram and Facebook.
2. Advertising Business Bolstered by Generative AI
Meta’s core advertising engine, which underpins more than 95% of its revenue, remains robust with its family of apps—Facebook, Instagram, WhatsApp, Threads and Messenger—serving an average of 3.54 billion daily active users in September 2025. The integration of generative AI into ad‐creation tools has begun to drive measurable improvements in click‐through rates and ad pricing power: internal tests show a 15–20% uplift in engagement for AI‐personalized campaigns versus static creative. Management expects these enhancements to translate into a mid‐single‐digit percentage gain in average revenue per user (ARPU) over the next two quarters.
3. Strong Balance Sheet and Valuation Cushion
Despite investing tens of billions in AI infrastructure over the past two years, Meta closed Q3 2025 with $44.5 billion in cash, equivalents and marketable securities. Its ad-driven operating activities generated $79.6 billion in net cash through the first nine months of the year, providing ample runway for high-growth initiatives. At a forward P/E multiple of 22, Meta trades in line with its five‐year average, offering investors a valuation buffer should management temper discretionary spending or accelerate buybacks.
4. Upcoming Earnings and Investor Guidance
Meta will report its fourth quarter and full‐year 2025 results after market close on January 28, 2026, followed by a conference call at 4:30 p.m. ET. Investors will be watching for updated guidance on capital allocation between AI, metaverse and short‐form video, as well as metrics on Reels monetization and mixed‐reality hardware progress. The company has emphasized its use of multiple disclosure channels—including its investor relations website and social media profiles—for timely updates under Regulation FD.