Meta Stock Soars as Zuckerberg Eyes 30% Metaverse Spending Cuts

Meta stock climbed 3.47% to $661.80 on December 4 after reports that Mark Zuckerberg plans to slash spending on the company’s metaverse efforts by up to 30%.

The gain added $22.20 to the stock price as investors reacted positively to the cost-cutting announcement.

Bloomberg reported that Meta Platforms Inc. executives have discussed budget cuts as high as 30% for the metaverse group in 2026.

The reductions would target Meta Horizon Worlds virtual reality product and the Quest VR headset unit.

Meta Stock Gains as Investors Welcome Spending Cuts

Meta stock traded in a range of $661.57 to $676.10 during the December 4 session. The company’s market capitalization stands at $1.67 trillion, with a price-to-earnings ratio of 29.29. Average daily trading volume reached 22.52 million shares.

The stock’s year range spans from $479.80 to $796.25. The current price sits near the middle of that range, with room for upside if cost-cutting measures meet investor expectations.

Investors have long viewed the metaverse division as a drain on resources. The positive Meta stock reaction shows market approval for Zuckerberg’s willingness to reduce spending on projects that have not delivered expected returns.

Zuckerberg Asks for 10% Cuts Across Meta

During annual budget planning for 2026, Zuckerberg met with executives at his Hawaii compound last month. The CEO asked Meta executives to find 10% cuts across all divisions.

The metaverse group received instructions to cut deeper than other units. The majority of proposed cuts would hit Meta’s virtual reality group, which accounts for the bulk of metaverse-related spending.

Reductions would also target Horizon Worlds, the company’s virtual world platform that has struggled to gain user traction.

The metaverse group operates within Reality Labs, Meta’s division focused on long-term bets like VR headsets and AR glasses. Reality Labs has incurred losses exceeding $70 billion since the start of 2021, with no clear path to profitability.

Layoffs Possible as Early as January 2026

Cuts as high as 30% would likely include layoffs beginning in January 2026, according to sources. A final decision has not been made on the exact scale of reductions or timing of workforce cuts.

Meta previously laid off more than 100 staff across Reality Labs in recent months. Additional layoffs would follow a pattern of cost-cutting measures Zuckerberg has implemented across the company since late 2022.

Instead of metaverse projects, Zuckerberg has shifted attention to developing large AI models that power chatbots and generative AI products. The CEO now focuses on hardware products linked to AI experiences, such as Meta’s Ray-Ban smart display glasses.

Analysts Predicted Metaverse Project Shutdown

Some analysts and investors have advocated that Zuckerberg remove Reality Labs products that drain resources without generating revenue. In April, Mike Proulx, a vice president at research firm Forrester, predicted Meta would “shutter its metaverse projects, like Horizon Worlds” before year-end.

“Meta’s Reality Labs division continues to be a leaky bucket,” Proulx stated, pointing to the unit’s losses. Shuttering metaverse efforts would allow the company to focus on AI projects, including Llama, Meta AI, and AI glasses.

The 30% spending cut falls short of complete shutdown but moves in the direction analysts recommended. Meta stock performance suggests investors view the compromise as acceptable progress toward improved profitability.