Meta Restructures Reality Labs With Layoffs Targeting Gaming and Fitness Teams
Meta is pressing forward with a major restructuring of its Reality Labs division, laying off an undisclosed number of employees last Thursday.
The cuts have reached Oculus Studios, Meta’s in-house gaming arm for the Quest VR headsets, and the team behind Supernatural, the popular VR fitness app acquired for over $400 million.
A Meta spokesperson confirmed the changes, explaining that "some teams within Oculus Studios are undergoing shifts in structure and roles that have impacted team size."
They also stated that the company remains "committed to investing in mixed reality experiences, including fitness and games."
How The Changes Are Affecting Supernatural And Quest
One direct consequence of the layoffs is a reduction in weekly workouts for Supernatural subscribers, as the team confirmed in a Facebook post.
Despite this, Meta insists its ambition to deliver “the best experiences possible for the Quest and Supernatural communities remains unchanged.”
Employees affected are reportedly being given the opportunity to apply for other roles within Meta.
An internal email viewed by Business Insider told impacted workers,
"If you choose not to look for another role at Meta or are unsuccessful in finding a new role, your termination date will be May 23, 2025."
According to the company’s careers page, 495 roles are still open within Reality Labs.
Why Meta Is Tightening Operations At Reality Labs
The restructuring is part of a broader efficiency drive.
Earlier in January, Meta revealed plans to eliminate nearly 4,000 positions to “raise the bar on performance,” as CEO Mark Zuckerberg described it.
Business Insider previously reported that performance-based cuts impacted at least 560 Reality Labs employees at that time, with nearly half coming from the Horizon team.
Andrew Bosworth, Meta’s Chief Technology Officer and head of Reality Labs, earlier described 2025 as "the most critical" year of his eight-year journey with the division.
In a memo obtained by Business Insider, Bosworth stated,
"This year likely determines whether this entire effort will go down as the work of visionaries or a legendary misadventure."
He stressed that the success of Horizon Worlds on mobile would be key to Meta’s broader metaverse ambitions.
Meta Balances Staff Cuts With Open Positions
While Reality Labs is trimming parts of its workforce, Meta continues to hire selectively.
A spokesperson confirmed that many affected employees have already been matched to internal job interviews.
This approach suggests Meta is aiming for a more targeted reorganisation rather than a wholesale retreat from mixed reality investments.
Strong Sales But Reality Labs Remains Costly
Financial results offer a mixed picture for Reality Labs.
Although the division posted record-breaking revenue in 2024, largely driven by strong sales of Meta Quest 3S headsets and Ray-Ban Meta Smart Glasses, it continues to operate at a heavy loss.
In the fourth quarter alone, operating expenses for Reality Labs neared $5 billion.
During Meta’s Q4 earnings call in January, Zuckerberg noted that "the number of people using Quest and Horizon is steadily growing," and described 2025 as a "pivotal year for the metaverse."
He also teased plans to launch more "visually stunning content" later this year.
What To Expect From Meta’s Next Financial Update
Meta is set to report its Q1 earnings for 2025 on 30 April, offering a clearer view of how Reality Labs is performing after these internal changes.
The upcoming results are expected to shed more light on whether the company’s renewed focus on mixed reality is paying off — or whether further adjustments will be needed in the months ahead.
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