Augmented-reality unicorn Magic Leap cuts half of jobs in major restructuring affecting 1,000 employees
- Magic Leap is planning to wind down its consumer business to focus on its enterprise products, say people familiar with the matter
- The augmented-reality start-up has raised more than US$2 billion from high-profile investors including Alphabet and Alibaba
About 1,000 employees will be affected, the people added. The company is planning to wind down its consumer business and will instead focus on its enterprise products, the people said, asking not to be identified because the matter is private.
The decision to abandon its consumer ambitions represents a dramatic retreat for a company that was at one time seen as the future of at-home augmented reality.
“While our leadership team, board, and investors still believe in the long-term potential of our IP, the near-term revenue opportunities are currently concentrated on the enterprise side,” chief executive officer Rony Abovitz said in a statement posted on the company’s website, confirming the earlier Bloomberg News report.
Abovitz said that the company made “the difficult decision to lay off a number of employees across Magic Leap,” without elaborating on numbers.
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“These changes will occur at every level of our company, from my direct reports to our factory employees,” he said.
Magic Leap’s board is also considering taking on new outside investment as well as a partnership with a large health care company, the people added.
Abovitz said that the company is in “the process of negotiating revenue generating strategic partnerships that underscore the value of Magic Leap’s technology platform in the enterprise market.”
Efforts to command that high a valuation faltered after global economies ground to a halt amid the spread of the coronavirus, the people said.
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An estimated 273,083 employees were let go at 285 start-ups since March 11. That figure comes from Layoffs.fyi, a tracker that measures publicly announced job cuts. The actual total is likely far higher because not all companies have made public announcements.
A representative for Magic Leap declined to comment on further details.