Meta Platforms (NASDAQ:META) jumped more than 6% in early trading Thursday after a Bloomberg News report revealed that CEO Mark Zuckerberg is preparing to sharply scale back spending on the company’s metaverse initiatives.

The report said Meta leadership has discussed reducing the metaverse division’s budget by as much as 30% in 2026. The group includes Meta Horizon Worlds and the Quest virtual reality team. Cuts of that size could trigger layoffs as early as January, although final decisions have not yet been made.

These potential reductions are tied to Meta’s annual budgeting cycle, which this year included a series of strategy meetings at Zuckerberg’s Hawaii compound. While the CEO has reportedly asked for 10% cost cuts across the entire company—a request that has accompanied several past planning cycles—the metaverse unit is being considered for far deeper reductions.

According to Bloomberg’s sources, Meta has not seen the level of competitive pressure in the metaverse space that it expected several years ago. Most of the cuts under review would target the company’s virtual reality operations, which represent the majority of its metaverse-related expenses, as well as Horizon Worlds.

Meta’s heavy investment in the metaverse has drawn criticism from investors who argue the effort has consumed large amounts of capital without producing meaningful returns.

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