Magic Leap Plans Layoffs Due to COVID-19

The business is also transitioning to a focus on the enterprise market

The current pandemic has tech-darling Magic Leap making the hard choice of layoffs to focus its business more on enterprise market and fulfilling its next-gen product.

Magic Leap glasses on a table
Getty Images / Bram Van Oost / EyeEm

Magic Leap, the "Spacial Computing" startup that raised a ton of interest (and cash) has announced layoffs across its company.

COVID-19 and Enterprise: The two main reasons the company cites for the layoffs are the current pandemic and a move to focus on the enterprise market. The company says that the decreased availability of capital and the interest in longer-term investments by its board and top management team has led to this difficult decision.

What is Magic Leap? Founded in 2010, Magic Leap rode the wave of VR and AR technology buzz to produce a headset that projects a light field into the eye that makes it seem like virtual objects are in the room with you. Magic Leap One, the first consumer version of the technology, released for a cost that started at $2,295.

Magic Leap says: "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."

Behind the scenes: Magic Leap has never quite fulfilled the promises of its early tech demos (or $2 billion investments). Bloomberg even reported on a possible sale of Magic Leap to come in the near future. A move to enterprise makes sense, especially after the first Magic Leap headset arrived with a high price and fewer features than expected.

Looking forward: CEO Rony Abovitz believes that post COVID-19, companies will be looking for ways to "operate across vast distances and connect with their customers in ways that mimic physical interactions."

Bottom line: Regardless of the future, however, layoffs hurt now, especially during this time of crisis. "This is a time of change and sadness, of deep challenges, but also a way forward to the future," Abovitz wrote in a blog post. That future might be brighter for a company and technology that can support a changed society where we may be doing quite a bit more via remote and virtual systems.

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