Episode summary
Zuckerberg Plans to Cut Metaverse Group's Budget Up to 30% | Bloomberg Intelligence
Bloomberg Intelligence
· · Hosts: Paul Sweeney, Scarlet Fu, Norah Mulinda · Guests: Caroline Hyde, Anurag Rana, Lindsay Dutch, Mark Douglas
Summary
Meta’s reported plan to cut metaverse spending by as much as 30% became the day’s headline, with the host and a guest arguing that the company is shifting resources toward AI rather than virtual reality. The discussion said the cuts could come with layoffs and reflect a broader reset inside Reality Labs, where Ray-Ban Meta glasses and augmented reality still have traction while the original virtual-reality bet has yet to deliver the expected consumer use case. The stock reaction was described as positive, reinforcing the idea that investors want capital redirected to AI infrastructure and clearer returns.
The conversation then turned to Salesforce, where a guest said the company’s core business is still under pressure even as Agentforce and Data 360 are gaining momentum. The argument was that AI products are improving, but not yet big enough to offset slower enterprise IT spending and decelerating remaining performance obligation growth.
Dick’s Sporting Goods was presented as a relatively resilient consumer name, with strength in the legacy business partly offset by the Foot Locker acquisition and execution risk there. The final segment on media focused on Warner Bros. Discovery, where the guest said Netflix appears to have the inside track and broader streaming consolidation looks likely as companies fight for content, scale, and ad-supported revenue.
Key takeaways
- Meta’s reported 30% metaverse budget cut was framed as a reallocation toward AI infrastructure, not a retreat from spending overall.
- A guest said Salesforce’s AI products are gaining momentum, but core demand is still weak because enterprise IT spending remains tepid.
- The guest said Salesforce’s order-book growth is still decelerating, with Informatica inflating the headline number.
- Dick’s Sporting Goods was described as benefiting from resilient higher-income demand, even as Foot Locker creates turnaround risk.
- The media discussion said Netflix may have the inside track on Warner Bros. Discovery, and consolidation is likely across streaming.
Notable quotes
“They're going to cut about 10% across the entire business. That's tends to be what's happens at this time of year”
“See, when you have to invest billions in the AI side of it, you got to find that money somewhere”
“the core business is still struggling but when it comes to some of their AI products that is starting to do well”
“the stock reaction last night you know was up five six%. And finally people have when you really scrape the numbers”
“I think most shareholders are like I don't really get the whole metaverse thing”
How the episode opens
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Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcast or watch us live on YouTube. And one of the bigger, I think, stock news stories today, Kurt Wagner, Bloomberg News breaking the story that um the folks at Meta uh cutting back some of their spending on the metaverse in particular by as much as 30% which is a big number cuz remember folks this company pivoted pivoted hard to the metaverse several years ago to the point where they changed their name from Facebook to metaverse.
This was a big big pivot for Mark Zuckerberg and now kind of dialing it back a little bit. So we want to get some more reporting on that. We turn to Caroline Hyde.
Uh she joins us here in studio uh Bloomberg Tech co-anchor. So this is a kind of a big move I think for Mr. Zuckerberg.
Don't you Caroline? It's a signal. And what's interesting about it is as usual as they think about the budget for 2026, they're going to make layoffs.
They're going to cut about 10% across the entire business. That's tends to be what's happens at this time of year. But he gathered his top executives in his house in Hawaii to discuss, okay, where should most of the resources be coming from?
Because remember, they're spending a ton on AI and people have been worried about that. How can he offset that? Well, 30% more cuts therefore going to this particular part of reality labs.
Now, reality labs are still going to be making your Ray-B band meta glasses. They've seen real interest in the AI use in augmented reality, but virtual reality, we're not living in it yet.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- metaverse budget cuts
- meta spending and layoffs
- enterprise it spending
- salesforce contract backlog
- media streaming transactions
Companies and tickers mentioned
- META
- CRM
- DKS
- Meta Platform
- Salesforce
- Dick's Sporting Goods
- MNTN
- Warner Bros. Discovery
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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