Magic Leap was in trouble long before the pandemic. It may have been the tipping point for change but it wasn’t the sole cause of Magic Leap’s fall from grace.
Magic Leap, the augmented reality startup that took the Internet by storm half a decade ago with a mind-blowing tech demo, is reportedly laying off roughly half of its workforce amid a major restructuring effort according to a report from Bloomberg on Wednesday.
Magic Leap founder Rony Abovitz acknowledged a reduction in team size in a press release published earlier today but didn’t specify how many employees would be leaving the company. Sources familiar with the matter told Bloomberg that about 1,000 staffers will be affected by the cuts as Magic Leap scales back its consumer business and focuses on the enterprise side.
Abovitz indicates that Magic Leap will no longer go after the consumer AR market, and instead compete in the enterprise and healthcare markets. This would frame the company’s headsets against Microsoft’s HoloLens technology. He predicts that the post-COVID world will require more remote experiences that mimic in-person interactions, which will help the company succeed in business and medical applications: “Magic Leap’s pioneering work in the field provides us with a rich platform of technology and know-how to help usher in this era of Spatial Transformation.”
It’s difficult to say whether or not this restructuring and change in strategy will help the company succeed Magic Leap’s troubles started well before the coronavirus pandemic. It’s also disheartening to see so many people lose their jobs during such a trying time. However, it’s not exactly surprising, given how many other companies are struggling.