Meta burned $19 billion on VR last year, and 2026 won’t be any better

Earlier this month, Meta laid off 10% of the staff at Reality Labs, its virtual reality unit, reportedly cutting as many as 1,000 employees. Now, in a development that seems directly related, the company has revealed that the unit lost many billions of dollars last year.

On Wednesday, Meta’s earnings report showed its complex virtual reality business had lost about $19.1 billion in 2025, slightly more than it lost in 2024 (that year losses hovered around $17.7 billion). In its fourth quarter, the unit posted a loss of $6.2 billion, the report shows.

Those losses were relative to what the unit generated in sales: $955 million in Q4 and about $2.2 billion in all of 2025.

During the company’s earnings call on Wednesday, Mark Zuckerberg struck a tone of optimism for his company’s VR team, noting that losses in 2026 are expected to be much the same.

“For Reality Labs, we’re directing most of our investment toward glasses and wearables going forward while we focus on making Horizon a massive success on mobile and turning VR into a profitable ecosystem over the coming years,” Zuckerberg said on the call. However, the CEO noted that losses were expected to continue. “I expect Reality Lab’s losses this year to be similar to last year,” Zuckerberg said, while noting that this year would “probably be the peak as we gradually begin to reduce our losses going forward.”

When Meta announced a pivot toward the “metaverse” in 2021, the move was viewed with a certain amount of skepticism, and during its first year of VR efforts, the company faced harsh criticism — even being referred to as an “international laughingstock.” Almost half a decade later, that skepticism hasn’t exactly abated. As the VR business continues to lose money and Meta continues an aggressive pivot away from VR and toward AI, it’s unclear what exactly will turn around the ailing business.

Last week, CNBC reported that, in addition to the layoffs, Meta had plans to close a number of its VR studios — another sign that the company’s interest in virtual reality is waning. The company also recently announced that it would retire its standalone Workrooms app — which the company had pitched to office workers as a VR room that could be used to hold meetings.