According to Bloomberg, the AR star unicorn company Magic Leap, once seen as the “future of augmented reality”, recently announced that it is about to undergo a major restructuring, including layoffs of 1,000 people, accounting for about half of its total workforce; while abandoning its consumer business , such as games and entertainment applications, and instead focus on developing enterprise products.
In response to the layoffs, Magic Leap CEO Rony Abovitz said in a statement on the company’s website: “The company has made the difficult decision to lay off staff, and layoffs will occur at all levels of the company, from senior management reporting directly to me to factory employees. These changes are happening at every level of our company.”
Although Magic Leap has previously emphasized that it is a consumer device company, Rony Abovitz said in this statement that recent changes in the economic environment have reduced the availability of capital and reduced their desire for long-term investments, “although Our leadership team, board of directors and investors continue to believe in the long-term potential of our intellectual property, but our short-term revenue opportunities are currently focused on the corporate side.”
(Magic Leap’s first product: AR glasses)
It is understood that in order to attract more corporate customers, Magic Leap has made a number of strategic plans in the past two years, including changing product names and seeking to sell shares.
However, Magic Leap’s future seems uncertain. On the one hand, Rony Abovitz wrote in the statement: “Given the very difficult and challenging environment businesses now face, our technology needs are increasing, and we are currently negotiating revenue-generating strategic partnerships, which underscores the fact that Magic The value of the Leap technology platform in the enterprise market.”
On the other hand, according to people familiar with the matter, although Magic Leap is trying to negotiate with large companies such as Facebook and Johnson & Johnson, it has not made substantial progress. Facebook isn’t interested in acquiring Magic Leap’s business because social media giants like Facebook are facing huge operating pressures due to rising tariffs on VR products and the expanding economic impact of the coronavirus.
(Rony Abovitz, CEO of Magic Leap)
According to public information, Magic Leap was founded in 2011 and is an augmented reality company located in Florida, USA.
As one of the most well-funded consumer hardware startups in history, Magic Leap has received 5 rounds of public financing, including Google, Alibaba, JPMorgan Chase, Saudi Arabian Public Investment Fund and other well-known investors, raising more than $2.6 billion in funding. But so far, Magic Leap has not been able to achieve “economic independence” and still relies heavily on investors’ funds to maintain operations.
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