Magic Leap Inc., augmented-reality startup that raised more than $2 billion from investors including Alphabet Inc. and Alibaba Group Holding Ltd., is cutting about half of its workforce as part of a major restructuring.
About 1,000 employees are expected to be affected. The company is planning to wind down its consumer business and will instead focus on its enterprise products.
Here is what the company said:
As businesses around the world struggle to adapt to unprecedented change, we too have had to examine the way our company operates. The recent changes to the economic environment have decreased availability of capital and the appetite for longer term investments. 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.
To better prepare Magic Leap for the future, we have taken a close look at our business and are making targeted changes to how we operate and manage costs. This has made it necessary for us to make the incredibly difficult decision to lay off a number of employees across Magic Leap. This has been a painful process, as every member of our Magic Leap team has demonstrated not only unparalleled talent but a true passion for our company's mission. But after lengthy, careful consideration, I have determined this is ultimately necessary to give us the best chance for future success. These changes will occur at every level of our company, from my direct reports to our factory employees.
The company said it would align efforts to focus on the areas of its business that advance its technology, ensure delivery of Magic Leap 2, and expand product-market fit and revenue generation. "This transformation also means that we must decrease investments in areas where the market has been slower to develop, providing us with a longer runway while retaining the ability to explore and build on future use cases when the market signals readiness," Magc Leap added.
Magc Leap is also in the process of "negotiating revenue generating strategic partnerships."
"We are at the beginning of a long journey, and I expect that great things will come from the team that continues on with Magic Leap, and I also expect great and wonderful things from those who are leaving us now. Their warmth, brilliance, creativity, and experience will be deeply missed," the company added.
Magic Leap, founded in 2011, unveiled a $2,300 headset in 2018 after years of work and has pledged to deliver technology rivaling television or the telephone in societal impact.