AI Capital Bureau - Shi Tao

As 2026 begins, the festive spirit of Christmas in Silicon Valley has not fully faded, but for employees at Meta Reality Labs, this "twilight year" has been far from blissful.

According to multiple media sources including Bloomberg, Meta is making sweeping adjustments to its metaverse business, with the Reality Labs division laying off over 1,000 employees. This is not just a simple organizational restructuring but more akin to an embarrassing slap in the face—the metaverse vision that Mark Zuckerberg once hailed as the "future" and even went so far as to rename a trillion-dollar company "Meta" for is now experiencing a brutal crash landing from the stratosphere.

When OpenAI is no longer "Open," and now even Meta is no longer "Meta," we can't help but ask: If they abandon the metaverse, will Meta need to change its name again?

This Cut Goes Straight to the Heart

"I woke up to find an email in my inbox. Either take the money and leave, or transfer within two months."

This is a self-narration from a Meta employee on social media. There was no warm farewell, only a cold, binary choice. The layoffs affected approximately 10% of Reality Labs' workforce, impacting not just regular employees but even newly hired staff.

More shockingly, Meta is making drastic cuts to its content ecosystem. There was a time when Meta spared no expense in acquiring major studios to fill its empty metaverse. Now, Twisted Pixel, the developer of Deadpool VR; Sanzaru Games, the creator of Asgard's Wrath; and Armature Studio, responsible for the VR port of Resident Evil 4—three prominent VR studios—have been ruthlessly shut down by Meta. Even the highly acclaimed VR fitness app Supernatural has been put on pause, with only basic operations maintained and no new features in development.

This sends an extremely dangerous signal: Meta is abandoning the heavy-asset model of "self-production and self-sales." Tamara Sciamanna, Director of Oculus Studios, stated bluntly in an internal memo that future investment will shift from heavy in-house development to ecological collaboration. To put it nicely, it's "relying on third parties." To put it bluntly, "the landlord has no more grain," and whoever wants to do it can, but Meta won't be investing anymore.

Even Horizon Worlds, once seen as the core of metaverse social interaction, has had its team resources almost entirely shifted to mobile. The grand narrative of fitting all of humanity into VR headsets has truly collapsed.

$70 Billion in Tuition Fees: Too Expensive

Why has Zuckerberg decided to take such drastic action this time? The answer is simple: too much money has been burned, and the dream remains unfulfilled.

In 2021, during a special period, Facebook rebranded to Meta, vowing to go all-in on the metaverse. Reality Labs has since been highly anticipated but also resembles a bottomless black hole. According to statistics, the department has accumulated losses exceeding $70 billion. What does that mean? That's enough money to buy 35 Manus.

Yet, what has this $70 billion bought? Bulky headsets? Horizon Worlds with graphics comparable to The Sims from decades ago? Or Zuckerberg's legless virtual avatar?

Wall Street's patience is limited. With AI developing rapidly, Meta's investors are furious to see the outdated metaverse business still losing money on the financial reports. If Zuckerberg could still use "long-termism" as an excuse in previous years, by 2026, with the metaverse business still unable to sustain itself, any excuse seems feeble.

More embarrassingly, Meta finds itself alone.

A few years ago, everyone was hyping the "first year of the metaverse," with Microsoft and Disney jumping in. Now, Microsoft has shut down its virtual social platform and disbanded its mixed reality team; Disney has dissolved its metaverse strategy department. When the tide recedes, Meta is left swimming naked. It's even more awkward because its name is Meta.

From Metaverse to AI: A Strategic Retreat

Of course, Zuckerberg is not foolish. While slashing the metaverse, he has already found a new lifesaver—AI.

This round of layoffs is less about "contraction" and more about "diversion." The saved resources have a clear destination: AI hardware and wearable devices.

This brings us to an unexpected success—the Ray-Ban Meta smart glasses. Originally seen as a "supporting role," this lightweight device has far exceeded market expectations. Without bulky screens or dizziness, it validates the feasibility of a "screenless AI carrier." Meta is planning to aggressively expand production, aiming to increase annual capacity to over 20 million units by the end of 2026.

This marks a huge strategic shift. Meta has finally realized that users don't want to bury their faces in a heavy box weighing several hundred grams to enter a virtual world; they prefer wearing lightweight glasses to interact with the real world through AI assistants.

Thus, the hardware logic has changed. Smart glasses are no longer portals to the metaverse but have become the "senses" of AI assistants. Reality Labs is abandoning controllers and virtual roaming, instead establishing a new standard centered on "visual recognition + voice commands."

Zuckerberg's new goal is AGI (Artificial General Intelligence). To support this highly compute-intensive objective, Meta has even established a new "Meta Computing" department. The computing power originally reserved for the metaverse is now being fed entirely into AI large models.

This is not just a business adjustment but a collapse of faith. The grand ideal of building a "parallel digital universe" has ultimately succumbed to the practical demand for a "portable AI assistant." But we know that in the AI and AI smart device races, Meta is not a leader and is anxiously struggling.

How Embarrassing Is the Name "Meta" Now?

Back to our original question: When will the company change its name?

In 2021, Zuckerberg renamed Facebook to Meta, signifying "Metaverse First." This name carried his ambition to transcend social media and build the next generation of computing platforms.

But now, the situation has become extremely awkward.

The "metaverse" business has been marginalized, with Reality Labs becoming a major layoff zone. The company's core strategy is undoubtedly AI, making the name "Meta" somewhat comical. It constantly reminds the world that this is a company that renamed itself for a failed bet.

This is the Meta of today.

Zuckerberg can certainly force an explanation, stating that "Meta" means "beyond" in Greek and can refer to "beyond the current mobile internet" or "beyond human intelligence AI." Public relations rhetoric can always smooth things over.

But branding is not just about explanation; it's about perception. In the eyes of the public and investors, the word "Meta" is firmly associated with a virtual world that has burned countless dollars, offered a poor experience, and even seemed absurd. As long as this name remains, people will recall the $70 billion in losses and the laid-off employees.

But will they rename it? Probably not.

Another rebranding would not only be costly but also a public admission of a complete strategic failure. For the extremely confident and even stubborn Zuckerberg, this would undoubtedly be a slap in the face. He is more likely to quietly "redefine" the meaning of Meta, turning it into a holding company name like "Alphabet" that lacks strong presence but encompasses everything, while letting Facebook, Instagram, WhatsApp, and new AI products take the lead.

Conclusion: The End of a Feverish Era

The mass layoffs at Meta's metaverse division not only mark a strategic correction for the company but also symbolize the end of a feverish chapter in the tech industry.

From the euphoria of 2021 to the life-saving measures of 2026, the metaverse concept bubble has finally been thoroughly burst. It turns out that technological development follows objective laws, and relying on capital to rush things or renaming for good luck cannot ultimately defy reality.

Zuckerberg remains the same daring Silicon Valley titan. He unhesitatingly abandoned yesterday's old flame and embraced today's new AI love. This ruthless decisiveness may enable Meta to survive or even thrive in the AI era, but the dream of the "metaverse" will likely remain in that crazy (fengkuang, insane) era, becoming another expensive footnote in tech history.

As for the company name? Maybe it doesn't matter anymore.

AI Capital Bureau is a professional observation and analysis platform focused on capital market dynamics in the artificial intelligence field. We closely track capital operations such as financing, listings, and mergers and acquisitions of AI companies, deeply analyze industry trends and investment opportunities, and provide valuable insights for industry participants. In an era of rapid AI technological development and deep capital integration, we are committed to becoming a bridge connecting AI innovation and capital markets, helping Chinese AI companies achieve value discovery and growth.

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