Meta is preparing significant budget cuts for its metaverse division while also unveiling new AI-driven customer support tools, signalling a shift in priorities as the company tries to balance cost pressures with its push into artificial intelligence.

According to a Bloomberg report, Meta is considering reducing funding for its metaverse initiative by as much as 30 per cent as part of its 2026 budget planning. The discussions reportedly took place during a series of meetings at CEO Mark Zuckerberg’s Hawaii compound last month. Such deep cuts would likely involve layoffs as early as January. Meta declined to comment when contacted by Reuters.

News of the potential reductions lifted Meta’s shares by 4 per cent, easing investor concerns about a project that has consumed more than 60 billion US dollars since 2020. The company rebranded from Facebook to Meta in 2021 to emphasise its long-term bet on virtual and augmented reality, yet the metaverse remains a niche interest outside the gaming community. Reality Labs, which oversees the metaverse effort, also develops the Quest mixed-reality headset and Ray-Ban smart glasses made with EssilorLuxottica.

Analyst Craig Huber of Huber Research Partners described the cuts as a sensible shift that aligns spending with a revenue outlook that has not materialised as the company once hoped. Despite challenges in expanding the metaverse, Meta has gained an early advantage in the smart glasses market, as rivals such as Apple, Google and Snap have struggled to find traction with their own products.

The potential cuts come as Meta accelerates its work in artificial intelligence following a lukewarm response to its Llama 4 model. The company has committed up to 72 billion US dollars in capital spending this year to support its AI ambitions, contributing to a broader trend that will see major tech companies allocate about 400 billion US dollars to AI in 2025. Meta recently reorganised its AI teams under Superintelligence Labs, with Zuckerberg personally driving recruitment and offering highly competitive compensation packages to top talent and start-ups.

While Meta is repositioning itself strategically, it is also trying to repair its reputation for poor customer support. The company has acknowledged that help provided through Facebook and Instagram has often failed to meet expectations, with some users resorting to small claims court to resolve account issues.

To address this, Meta is launching a new support hub across both platforms, designed to consolidate all assistance tools in one location. The hub will include an AI chat feature to answer questions about accounts and platform policies. For cases where users are locked out, Meta points to its external account recovery tool, which has been upgraded with improved email and text alerts and better detection of familiar devices and locations.

The company says that its revamped recovery process now adjusts more intelligently to individual situations and includes an optional selfie video step for identity verification. Meta has also begun testing an AI support assistant on Facebook that promises instant and personalised assistance for tasks such as profile management and account recovery. The assistant is still in early testing and available only to a limited group of users worldwide. For now, the most reliable access to live support remains tied to a Meta Verified subscription, though feedback on its effectiveness remains mixed.

Meta reports that its recent improvements have boosted the success rate of hacked account recovery by more than 30 per cent in the United States and Canada this year.