Camouflaj, the virtual reality developer best known for Batman: Arkham Shadow, is the latest studio to be affected by this week's round of layoffs issued by Meta, its parent company.

A Meta spokesperson confirmed the news with Kotaku yesterday evening, saying that while there have been job cuts at Camouflaj, the studio is not shutting down.

The context for the clarification is due to Meta effectively shuttering three other VR-focused developers under its mantle this week, as it laid off around 10 percent of its VR/AR-focused Reality Labs division. These were Asgard's Wrath developer Sanzaru Games, Deadpool VR developer Twisted Pixel Games, and Resident Evil 4 VR developer Armature Studio.

"We said last month that we were shifting some of our investment from Metaverse toward Wearables," a Meta spokesperson said to Game Developer. "This is part of that effort, and we plan to reinvest the savings to support the growth of wearables this year."

Related:Xbox hardware now costs a lot more in the UK and Europe

Yesterday, Aftermath reported that Camouflaj is now made up of "just a handful of employees" who are working on "the new user experience for upcoming hardware."

According to Aftermath's sources, studio heads have reportedly been let go, and active game projects under development have been shut down. Moreover, sources claimed that a sequel to Batman: Arkham Shadow was in development at Sanzaru, one of the studios that was closed.

Meta's Reality Labs division has been bleeding out talent and billions of dollars for the past couple of years. This week's round of layoffs is at least the third occasion that Meta has cut jobs specifically in Reality Labs, following reports in June 2024 and April 2025.

As of Meta's fiscal report published in July 2025, Reality Labs reported an operating loss of $4.5 billion during the second quarter ended June 30, 2025—a not-at-all uncommon occurrence if you've been following previous fiscal reports along.