Meta Slashes Metaverse Budget by 30%, Stock Soars, Crypto Hit

Meta plans to cut its metaverse division budget by up to 30% for 2026, leading to layoffs and a strategic shift toward more profitable technologies. The move boosted Meta's stock and coincides with a collapse in metaverse-related crypto.

Meta is reportedly planning to cut the budget of its metaverse division, Reality Labs, by up to 30% for 2026, marking its largest financial pullback since its rebranding in 2021. This move comes after the division accumulated significant losses, with $4.5 billion lost in Q2 2024 alone and over $70 billion since 2021. The budget reduction is expected to result in layoffs and reflects a strategic shift toward technologies with clearer paths to profitability, such as generative AI and consumer hardware. The announcement led to a surge in Meta's stock price, rising between 4% and 5%, as investors welcomed the focus on financial discipline. The decision also coincides with a collapse in the market value of metaverse-related crypto tokens, which have dropped from over $500 billion to $3.4 billion. Meta's move signals a broader industry pivot away from the metaverse narrative, impacting both tech and crypto sectors.