Shares of Meta Platforms rise about 4% on Thursday after Bloomberg reported that CEO, Mark Zuckerbergis looking to make significant cuts to the company’s metaverse resources.
Bloomberg indicated that the company has considered budget cuts of up to 30% for the unitciting people familiar with the conversations.
The move would be significant for Facebook’s parent company, which changed its name to Meta in October 2021 to signal its pivot beyond social media.
Zuckerberg then declared that “the metaverse is the next frontier, just like social media was when we started.” The unit has spent more than $60 billion since 2020.
The proposed cuts would likely include layoffs, according to Bloomberg, which indicated they were part of budget planning for 2026. The first layoffs could come in January.
The information comes at a time when Meta fights to remain relevant in the race for artificial intelligence from Silicon Valley, after its Llama 4 model was poorly received.
Earlier this year, the company launched a superintelligence lab after hiring Scale AI CEO Alexandr Wang as part of a $14.3 billion investment that gave Meta a 49% stake in the startup.
Meta shares are up 13% for the year, although they have fallen 17% since reaching annual highs in August. Of course, they are up 38% from their April lows.