Meta has shuttered three VR studios and laid off over 1,000 employees from its Reality Labs division as part of a shift away from metaverse investments toward AI-powered wearables. The closures include Armature, Sanzaru, and Twisted Pixel, with the popular Supernatural app ceasing new content updates. Company leaders emphasize a continued but leaner focus on VR through third-party support.
Meta's Reality Labs division, responsible for virtual reality and metaverse products, has undergone significant restructuring. On January 13, 2026, reports emerged of over 1,000 layoffs, targeting teams focused on VR and metaverse development. This follows heavy financial losses, with Reality Labs costing more than $70 billion since 2021, despite successes like consumer VR headsets and smart glasses.
Among the cuts, Meta closed three in-house VR studios: Armature, which ported Resident Evil 4 to Quest in 2021; Sanzaru, known for Asgard's Wrath; and Twisted Pixel, which released Marvel's Deadpool VR in November 2025. Employees from Twisted Pixel and Sanzaru shared news of the closures on social media. Additionally, the VR fitness app Supernatural announced it would no longer receive new content or feature updates, though it remains active for users. "Due to recent organizational changes to our Studio, Supernatural will no longer receive new content or feature updates starting today," the company stated on Facebook.
Meta's CTO Andrew Bosworth outlined the strategic pivot in a memo, stating, “With the larger potential user base and the fastest growth rate today, we are shifting teams and resources almost exclusively to mobile to continue to accelerate adoption there.” The VR division will now operate as a "leaner, flatter organization with a more focused road map to maximize long-term sustainability," suggesting no immediate Quest 3 successor. Last month, Meta paused planned Horizon OS headsets from Asus and Lenovo, and no new VR headsets have been announced since the Quest 3S in 2024.
A Meta spokesperson confirmed the moves: "We said last month that we were shifting some of our investment from Metaverse toward Wearables. This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year." Oculus Studios director Tamara Sciamanna added in an internal memo, “These changes do not mean we are moving away from video games. With this change we are shifting our investment to focus on our third-party developers and partners to ensure long-term sustainability.”
The refocus targets AI hardware, such as the recent Ray-Ban smart glasses, amid Mark Zuckerberg's 2021 rebranding from Facebook to Meta, which has yielded limited metaverse progress.
