Augmented reality startup Magic Leap Inc, is set to lay off almost half of its employees, according to a report from Bloomberg.
Around 1,000 employees will be affected by the restructuring, which comes as Magic Leap moves to abandon its consumer business to focus on its enterprise products, according to anonymous sources familiar with the matter.
The move away from consumer products is a startling one, given the company’s successful investment rounds and was once considered a promising sign for augmented reality.
Chief Executive Officer Rony Abovitz confirmed the Bloomberg report in a statement posted on the company’s website:
“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.”
“These changes will occur at every level of our company, from my direct reports to our factory employees.”
According to Bloomberg’s sources, the company is considering seeking new investment, as well as a partnership with a health care company. Abovitz remarked in his statement that the company is in: “the process of negotiating revenue generating strategic partnerships that underscore the value of Magic Leap’s technology platform in the enterprise market.”
This is not the first time reports of layoffs at Magic Leap have emerged, after The Information reported in December last year that dozens of employees had been laid off after weaker-than-expected sales of the Magic Leap.
According to data from Layoffs.fyi, Magic Leap is just the latest technology startup to introduce layoffs during the COVID-19 crisis. An estimated 273,083 workers have been laid off from 285 startups since March 11th. However, this figure is likely to be much higher, as Layoff.fyi only measures publicly announced layoffs.