Meta, the social media behemoth, initiated a significant workforce reduction on Tuesday, slashing approximately 10% of its Reality Labs division. This downsizing is expected to impact more than 1,000 employees within the arm responsible for Meta Quest headsets and augmented reality hardware.
This restructuring has reportedly led to the complete dissolution of three internal development houses: Armature Studio, Twisted Pixel, and Sanzaru Games.
The news surfaced as displaced staff took to social media to share their experiences. Andy Gentile, a veteran designer at Twisted Pixel, announced on X (formerly Twitter) that the studio had been entirely shuttered, noting that Sanzaru Games was facing the same fate. These reports were echoed by VR gameplay designer Kathryn Yu on Bluesky and industry veteran Ray West on LinkedIn, both of whom confirmed the sudden closures.
“I’ve just been laid off. It appears the entire [Twisted Pixel] games studio has been shut down. [Sanzaru Games] too.” — Andy Gentile
Internal communications obtained by Bloomberg further confirmed that Armature Studio was included in the sweep. In a statement to Polygon, Meta spokesperson Tracy Clayton clarified the company’s shift in strategy, noting that the organization is reallocating capital from its broader Metaverse vision toward its “Wearables” category. Meta intends to funnel the savings from these closures into the growth of AI-powered glasses and other hardware this year.
The shuttered studios leave behind impressive legacies within the industry:
- Twisted Pixel: Originally famous for Xbox Live Arcade hits like ‘Splosion Man and The Gunstringer, the Austin-based studio was acquired by Meta in 2021 and recently launched Marvel’s Deadpool VR.
- Sanzaru Games: Before its 2020 acquisition, the team worked on iconic franchises like Sly Cooper and God of War. Under Meta, they developed the critically acclaimed VR epic Asgard’s Wrath.
- Armature Studio: Founded by former leads from Retro Studios, this outfit was responsible for ReCore and the highly praised VR port of Resident Evil 4 before joining Meta’s roster in 2022.
Since 2020, Meta’s Reality Labs has incurred operating losses exceeding $70 billion. The decision to dissolve these studios follows a recurring pattern of aggressive consolidation, mirroring the previous closures of Ready At Dawn and Downpour Interactive as the tech giant attempts to curb its mounting expenditures.
Source: Polygon
