Noah Romsdal Hallundbæk Sørensen
Meta is shutting down VR studios as Reality Labs faces fresh cuts.
Meta has begun a new round of job reductions that hit its virtual reality division, marking another shift in priorities at the company.
The move affects staff across multiple teams and studios tied closely to its Metaverse ambitions.
The full impact is still unfolding, but developers say the changes were sudden and deeply disruptive.
A strategic retreat
Meta is laying off about 10% of employees within its Reality Labs unit, a move expected to affect more than 1,000 people.
According to Bloomberg, the cuts include the closure of several VR-focused game studios as the company redirects resources toward artificial intelligence, smartphones, and wearable technology.
The decision comes just over four years after Facebook rebranded as Meta and committed heavily to building the Metaverse. At the time, the company positioned virtual reality as central to its future.
Developers at affected studios said notification letters were sent on Tuesday morning, with reactions quickly appearing across social media.
Studios shut down
Among the studios being closed are Twisted Pixel, Armature Studio, and Sanzaru Games. Twisted Pixel worked on Deadpool VR, Armature developed Resident Evil 4 VR, and Sanzaru was responsible for Asgard’s Wrath.
One former employee wrote: “I’ve just been laid off. It appears the entire Twisted Pixel games studio has been shut down. Sanzaru Games, too.” Another designer said: “unfortunately, I was part of the layoffs today at Meta, and will be seeking a new role. To my Twisted Pixel Games family: it was an honor to work alongside you for 3.5 years and ship Marvel’s Deadpool VR. We made something really special together and no one can ever take that away.”
Twisted Pixel previously gained recognition for Xbox Live Arcade titles such as The Maw and ’Splosion Man, later moving into VR after returning to independence in 2015.
Billions spent, focus shifts
Meta acquired Sanzaru in 2020, followed by Armature and Twisted Pixel in late 2022. The closures signal a pullback from in-house VR development as the company seeks to curb losses.
In a statement, Meta said: “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.”
According to Reuters, Meta has spent more than $60 billion on the Metaverse since 2020 under CEO Mark Zuckerberg’s direction. Reality Labs also produces the Quest mixed-reality headsets.
CNBC reported that Meta is not exiting VR altogether, noting the company is encouraging developers who build for Roblox to create content for Horizon Worlds.
Sources: IGN Nordic, Bloomberg
