According to Bloomberg News, Meta and EssilorLuxottica are evaluating an expansion of their AI-powered Ray-Ban smart glasses manufacturing capacity from 10 million to 20 million units annually by year-end. This proposed ramp-up would require an additional $500 million in specialized optics tooling and factory automation, and could shorten delivery lead times from eight weeks to four weeks. Industry analysts note that achieving this scale could drive unit costs down by 15% and position Meta as a leader in the nascent wearable AI market, generating potential annual revenues in excess of $4 billion by 2027.

Meta is set to lay off approximately 1,500 employees—around 10% of its 15,000-strong Reality Labs division—as part of a strategic shift toward artificial intelligence. Reality Labs has accumulated over $70 billion in operating losses since 2020, driven by slow consumer adoption of virtual-reality headsets and metaverse initiatives. The workforce reduction, scheduled to occur this week, will focus on teams developing VR headsets and the Horizon social platform. Meta CEO Mark Zuckerberg has concurrently instructed senior executives to freeze non-AI budgets for 2026, redirecting capital into data-center build-outs and core research in large-language and generative AI.

Despite a 20% stock pullback, Meta raised its fiscal 2025 capital-expenditure guidance to $70–$72 billion, with an even larger increase anticipated for 2026. This spending is underpinned by accelerating advertising revenue: in Q4, global ad sales grew 28% year-over-year, driven by a 35% rise in average price per ad and an 18% increase in impressions across Facebook, Instagram and Reels. That advertising momentum has generated over $90 billion in free cash flow in the past four quarters, effectively funding Meta’s $14.3 billion investment in Scale AI and its $2+ billion acquisition of AI agent startup Manus without additional equity issuance.