Meta CEO Mark Zuckerberg during the MetaConnect event on September 17, 2025 in Menlo Park, California.
David Paul Morris | Bloomberg | Getty Images
as meta While funding for artificial intelligence is increasing, the company’s Metaverse efforts continue to drain money.
Meta revealed in its first-quarter earnings report Wednesday that its Reality Labs division posted an operating loss of $4.03 billion on revenue of $402 million. Wall Street had expected a loss of $4.82 billion on revenue of $488.8 million in the first quarter.
Meta’s Reality Labs division, which develops virtual reality and augmented reality technology and wearable devices, has posted cumulative operating losses of more than $80 billion since late 2020. Facebook founder Mark Zuckerberg changed his company’s name to Meta in 2021, reflecting his view that both work and play will move to virtual worlds.
That vision was interrupted in late 2022 by the generative AI boom sparked by OpenAI’s ChatGPT. Although Meta has been widely seen as a laggard in AI, the company has google.
Meanwhile, Reality Labs is facing layoffs. Meta laid off approximately 1,000 Reality Labs employees in January as part of an effort to move VR-related resources to AI-powered wearable devices following the surprising success of smart glasses developed in partnership with Ray-Ban Meta. Essilor Lux Otica.
Meta implemented further layoffs in March, affecting hundreds of employees across Reality Labs, Facebook, global operations, recruiting, sales and other departments. Last week, Meta announced plans to cut 10% of its workforce, or 8,000 people, while ending efforts to fill 6,000 open positions.
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