Meta Platforms Inc.’s top technology executive has publicly conceded that the company’s ambitious push into virtual worlds diverted critical resources from its flagship VR headset, compromising the device that was supposed to anchor the vision. Andrew Bosworth, Meta’s chief technology officer and head of Reality Labs, spoke candidly at Axios House during the World Economic Forum in Davos, Switzerland, last week, revealing how overzealous metaverse development led to diluted attention on Quest headsets.

“The lack of focus comes at an expense of user experience and a great expense in terms of development cost,” Bosworth said, pinpointing the tight integration of Horizon Worlds—the company’s social VR platform—with Quest as a key misstep. Launched in 2021 as a shared space mimicking smartphone socializing, Horizon Worlds forced users into co-present environments upon donning the headset, clashing with diverse usage patterns from gaming to productivity. This approach, Bosworth explained, strained teams already burdened by building separate versions for VR and mobile after Horizon’s 2023 expansion to Android and iOS.

Bosworth’s Davos Disclosure

Bosworth framed the issues as a trio of challenges: murky communication of the metaverse vision, ballooning costs exceeding $4 billion quarterly since late 2021, and the problematic Horizon-Quest linkage. “Having to build everything twice—once for mobile and once for VR—is a tremendous tax on the team,” he noted, highlighting how mobile growth outpaced VR, prompting a reallocation. Meta now eyes “two much more focused bets”: bolstering third-party VR content on Quest and prioritizing Horizon Worlds on mobile devices.

The admissions follow a sweeping Reality Labs reorganization, including layoffs hitting about 10% of its 15,000 XR staff—over 1,000 roles—and the shuttering of three first-party studios: Sanzaru Games, Twisted Pixel Games, and Armature Studio. These cuts, announced in internal memos from Bosworth and confirmed across reports, redirect savings to surging wearables like Ray-Ban Meta smart glasses, which have tripled sales from 2024 levels per partner EssilorLuxottica.

Reality Labs’ Mounting Losses

Reality Labs has hemorrhaged approximately $64 billion in operating losses under Bosworth’s watch since he established the unit in 2017, with 2024 alone seeing $17.7 billion in red ink despite $2.1 billion revenue. Q4 2024 marked the division’s strongest quarter at around $1 billion, buoyed by Quest 3S holiday sales, but earlier periods lagged. Full Q4 2025 figures were due after market close on January 28, underscoring ongoing pressure amid CEO Mark Zuckerberg’s AI pivot, including a $14.3 billion Scale AI investment in 2025.

Bosworth’s January 14 all-hands meeting, billed as the “most important” of the year with in-person mandates, preceded notifications starting January 13. “To do this, of course, it’s tragic anytime your plans change and there’s a human cost; we found a bunch of roles that we just didn’t need anymore,” he said of trimming metaverse-specific efforts, insisting no net downsizing for Reality Labs overall as positions shift to wearables.

Strategic Pivot to Wearables and Mobile

The shakeup signals Meta dialing back VR hardware cadence for longer device lifecycles and heavier third-party reliance, per Road to VR. Oculus Studios Central Technology, behind titles like Asgard’s Wrath 2 and Deadpool VR, joins the closures, while Beat Games (Beat Saber) and BigBox VR (Population: One) persist. Bosworth emphasized sustainability: “We’re taking all of those [positions] and taking the investment on wearables, which is growing so rapidly for us.”

Internally, Bosworth had warned in a 2025 memo that the year would decide if Reality Labs became “visionary work or a legendary misadventure.” Horizon Worlds mobile shift aims to rival Fortnite’s success, freeing Quest for gaming and apps without forced social immersion. X discussions echoed user frustrations, with Reddit’s r/OculusQuest lamenting policies but welcoming third-party emphasis.

Quest’s User Experience Reckoning

Bosworth’s critique directly implicates Quest’s boot sequence, where immediate Horizon Worlds entry alienated users seeking gaming or work. “There’s lots of people who put this headset on for lots of different reasons. You want to support all those different use cases,” he said. Post-shakeup, Meta hints at UI refinements, potentially easing mixed reality window limits in Horizon Workrooms and integrating AI for smoother interactions, though specifics remain sparse.

Financially, the pivot aligns with Zuckerberg’s directive for 2026 budget trims to fuel AI, after $70 billion total metaverse spend since 2021. Ray-Ban glasses’ demand prompts doubled production by year-end, per Bloomberg. Quest persists as Meta’s VR leader—top Amazon console at Christmas—but growth trails expectations, prompting Bosworth to affirm: “VR is growing less quickly than we hoped.”

Industry Ripples and Future Bets

Reactions on X and Reddit mix optimism for leaner VR with skepticism; one r/virtualreality post tallied Bosworth-era losses at $63.59 billion. Competitors like Apple Vision Pro loom, but Bosworth touts Quest 3’s value. Meta retains the largest VR team, per Palmer Luckey, but refocuses on ecosystem support over in-house sprawl. As Q4 2025 earnings neared, analysts eyed earnings uplift from cuts, potentially high single digits by 2027 per BNP Paribas.

“We still plan on doing that [Horizon Worlds],” Bosworth assured, but with mobile-first reinvestment. The overhaul, detailed in Axios interviews and memos reviewed by Business Insider, Mashable, and The Verge, marks Meta’s clearest admission that metaverse zeal eroded Quest’s core appeal, setting stage for a more pragmatic XR path.