Meta's VR Unit Lost $19 Billion in 2025, 2026 Losses Expected to Be Similar

Earlier this month, Meta laid off 10% of the staff in its virtual reality unit, Reality Labs, reportedly cutting up to 1,000 employees. This move appears directly linked to recent financial disclosures showing the unit incurred massive losses last year. Meta's earnings report revealed that its virtual reality business lost about $19.1 billion in 2025, slightly more than the $17.7 billion loss in 2024. In the fourth quarter alone, the unit posted a $6.2 billion loss. These losses occurred despite generating $955 million in sales for Q4 and approximately $2.2 billion throughout 2025. During the earnings call, Mark Zuckerberg expressed optimism for the VR team but acknowledged that losses in 2026 are expected to be similar. He stated, "For Reality Labs, we are directing most of our investment towards glasses and wearables going forward, while focusing on making Horizon a massive success on Mobile and making VR a profitable ecosystem over the coming years." However, he noted that losses would continue, with 2026 "likely be the peak, as we start to gradually reduce our losses going forward." When Meta announced its pivot to the "metaverse" in 2021, it faced skepticism and criticism, even being called an "international laughingstock." Nearly five years later, that skepticism persists. As the VR business continues to lose money and Meta shifts focus toward AI, it remains unclear what will revive the struggling unit. Recent reports indicate Meta plans to close several VR studios in addition to the layoffs, suggesting waning interest in virtual reality. The company also announced it will retire its standalone Workrooms app, which was pitched as a VR meeting space for office workers.