Mixed reality (MR) headset maker Magic Leap announced lay-offs across every level of the company and a pivot away from its consumer ambitions, as part of a major restructuring forced by the Covid-19 (coronavirus) pandemic.
In a blog post, founder and CEO Rony Abovitz said it decided to lay off “a number of employees”, while suggesting it would no longer pursue a strategy to sell its headsets to consumers and instead concentrate on the enterprise side.
Abovitz did not specify the number of jobs to be cut, but Bloomberg reported as many as 1,000 people could go, half of the company’s workforce.
“As businesses around the world struggle to adapt to unprecedented change, we too have had to examine the way our company operates,” said Abovitz. “The recent changes to the economic environment have decreased availability of capital and the appetite for longer-term investments.”
Abovitz said it would adapt the company to these new market realties and focus on technology development to ensure delivery of its second MR headset, Magic Leap 2, while decreasing “investments in areas where the market has been slower to develop”.
Funding
Established in 2011, Magic Leap raised more than $2.3 billion in funding to date from major players including Japanese operator NTT Docomo [1], Google and Alibaba. It also struck a partnership with AT&T [2] in 2018 covering its first headset, Magic Leap 1.
With its latest push focusing on enterprise customers, Magic Leap steps-up competition with Microsoft and its Hololens headset.
News of Magic Leap lay-offs come a month after reports stated the company had begun discussing its future strategy [3] with an unnamed adviser, with a full or partial sale on the cards.
[1] https://www.mobileworldlive.com/devices/news-devices/ntt-docomo-backs-mixed-reality-start-up-magic-leap/
[2] https://www.mobileworldlive.com/devices/news-devices/att-locks-in-magic-leap-ahead-of-ar-release/
[3] https://www.mobileworldlive.com/devices/news-devices/magic-leap-eyes-potential-sale/
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