Magic Leap, the smart glasses startup that spent years building hype as the next big thing in augmented reality, has announced it is restructuring its business away from the consumer market and laying off a number of employees.
In a blog post titled “Charting a new course,” Magic Leap CEO Rony Abovitz announced that the company would be pivoting away from the consumer business to focus on enterprise.
“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,” wrote Abovitz in the post.
The company will also be laying off a number of employees, which Bloomberg reports to be half of the total workforce, with about 1,000 employees being let go. A source with knowledge of the matter told Business Insider that Magic Leap told employees about the changes happening in a company-wide call just moments before the blog was posted. The call was followed by emails informing staff who were being laid off.
“These changes will occur at every level of our company, from my direct reports to our factory employees,” Abovitz added in the blog post.
Abovitz said the current pandemic had caused “unprecedented change” around the world, leading Magic Leap to examine its own operations.
However, just last month it was reported that Magic Leap was exploring a sale of the company, as well as other options such as partnerships and a possible stock market listing.
Magic Leap spent years hyping up a product that no one could actually see, raising over $2 billion from major sources that included Google and Alibaba. In 2018 it finally released the Magic Leap One augmented reality goggles, which overlaid digital imagery onto the real world.
At the time, Magic Leap conceded that it was an early-adopter product, promising something more consumer-friendly down the line – but it sounds like that follow-up product won’t be happening any time soon, with the company turning to enterprise as a more lucrative source of revenue.
According to a report from The Information last December, sales of the Magic Leap One headset have failed to meet the company’s own expectations. Business Insider reported in 2018 the company was burning about $50 million a month.
A spokesperson from Magic Leap did not respond to Business Insider’s request for comment at the time of publishing.
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