Meta Platforms Reality Labs

Investments
48

I=9
Meta shares rose 7% after Bloomberg reported it plans to cut Metaverse budget by up to 30% next year

  • Meta plans to cut Metaverse budget by up to 30% next year, Bloomberg reported citing people familiar with the matter.
  • Layoffs are expected as early as January, though a final decision has not been made.
  • Majority of the proposed budget cuts are likely to hit Meta’s virtual reality group, which makes up the bulk of the Metaverse spending.
  • Meta shares rose as high as 7% after the market opened.

https://www.bloomberg.com/news/articles/2025-12-04/meta-s-zuckerberg-plans-deep-cuts-for-metaverse-efforts

Assessment
Meta Platforms reported Reality Labs losses of $13.2 billion in the 9 months ended September 2025 (page 8). Assuming loss of $18 billion in 2025, a 30% cut will translate to cost-savings of around $6 billion per year or around $2 earnings per share increase in 2026 (based on our 2026 base estimates).

The report could be true given the recent decision by Meta to move Metaverse’s vice president to MSL.

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