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Meta cuts 10% of Reality Labs, shutters three VR studios, and shifts focus to wearables

Meta cuts 10% of Reality Labs, shutters three VR studios, and shifts focus to wearables
source: gettyimages
March 25, 2026

Meta is trimming roughly 10 percent of its Reality Labs division, the arm responsible for the metaverse and VR initiatives, with several VR game studios reportedly being closed. The cuts come alongside the decision to pause new content development for the VR fitness app, Supernatural, though existing users will still be supported. Bloomberg reported the closures, and The Verge has confirmed via a Meta spokesperson.

The internal memo cited by Bloomberg notes the shutdown of Twisted Pixel Games, Sanzaru Games, and Armature Studio. Twisted Pixel, known for Marvel’s Deadpool VR, Sanzaru (behind the Asgard’s Wrath games), and Armature Studio (which worked on the Resident Evil 4 VR port) are all impacted. Staffers online have shared their layoffs in real time, with former employees confirming the closures.

“The entire Twisted Pixel Games studio has been shut down along with Sanzaru and Armature,” said Andy Gentile, a former Twisted Pixel level designer. Another former Twisted Pixel artist added that the move reflects strategy changes at Meta. And a former Sanzaru designer noted the broader impact on the company’s studios, with several being closed today.

Meta had previously acquired Within, the developer behind Supernatural, in 2023 after a regulatory settlement, and picked up Twisted Pixel and Armature in 2022, with Sanzaru added in 2020. Earlier, Meta closed Echo VR developer Ready at Dawn, which it had also acquired in 2020, in 2024. In a broader note about Reality Labs’ layoffs, Meta spokesperson Tracy Clayton said the company is shifting some investment from the Metaverse toward Wearables, and that the savings will be reinvested to support wearables growth this year.

Bloomberg’s reporting notes that the broader layoffs align with Meta’s strategy to reallocate funds away from metaverse projects toward wearable technology. Update as of January 13 added more details from Bloomberg about the studios’ closures. The news has sparked reactions from affected staff and industry observers, with many following the situation on their personalized feeds for updates.

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Jay Peters

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