Meta will reduce Reality Labs budget by 20% by 2026. This decision is in line with Meta's plans to move Reality Labs into production mode ahead of the high-profile hardware launches it plans to release in the coming years. According to Bank of America analysts, these cost-cutting measures will save Meta approximately $3 billion.

Meta's next earnings call is on July 31, and analysts expect similar results to its Q1 numbers, where the company saw revenue of $36.45 billion in 2023, up 27%. However, Reality Labs reported a loss of $3.8 billion for the quarter.

These cost-cutting measures may have been taken to realign Reality Labs' efforts and please investors. Reality Labs has lost approximately $55 billion since 2019. The future of Meta's VR and AR products will depend on the consumer market's interest in these technologies.

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