Meta Platforms shares came under pressure on Monday as reports surfaced that the company is cutting roughly 1,500 jobs from its Reality Labs division, marking a decisive shift away from the metaverse and toward artificial intelligence.
The stock closed January 12, 2026, at $641.97, down on the day, after selling accelerated into the final hour of trading.
Reality Labs Cuts Signal Strategic Reset
The reported layoffs affect about 10% of Reality Labs staff, the unit responsible for Meta’s metaverse ambitions, including VR headsets and Horizon Worlds. The move reflects growing internal and investor recognition that the division’s heavy spending has not translated into meaningful returns.
Since Meta’s 2021 rebrand, Reality Labs has accumulated more than $70 billion in losses, while revenue contributions have remained modest. By contrast, Meta’s core advertising business and AI initiatives continue to generate strong cash flow and market confidence.
Intraday Chart Shows Late Selling Pressure
The intraday TradingView chart highlights how the market reacted. META traded near $650 earlier in the session, but gradually rolled over through the afternoon. Selling intensified late in the day, pushing the stock sharply lower into the close near $642.
Volume also picked up during the sell-off, suggesting institutional repositioning rather than light profit-taking. The price action reflects short-term uncertainty rather than panic, with no extreme volatility spike visible on the chart.
Investors Favor AI Over the Metaverse
Investor response aligns with a broader pattern seen over the past year. Previous signals that Meta would rein in metaverse spending have generally been welcomed by the market, as capital is redirected toward AI infrastructure, data centers, and model development.
Meta’s leadership has framed 2026 as a pivotal year in the AI race, competing directly with firms such as OpenAI and Google. An internal meeting scheduled later this week is expected to outline how resources will be reallocated following the Reality Labs restructuring.
For now, the chart suggests the market is digesting the shift – cautious in the short term, but not abandoning confidence in Meta’s long-term AI-driven strategy.
