The tumultuous economic environment being experienced by nearly every business on the planet has also touched Florida-based augmented reality startup Magic Leap.
On Wednesday, the company announced that it laying off “a number” of staff throughout the company. According to a message posted by Magic Leap CEO Rony Abovitz, the layoffs will hit even executives who report directly to him.
“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,” said Abovitz.
Although Abovitz hasn’t revealed exactly who has been released from the company, several prominent Magic Leap staffers have removed Magic Leap from their Twitter accounts. Among those quietly making changes to their public social media profiles are Magic Leap’s vice president of product and engineering Gus Pinto, and enterprise and marketing team member Cathy Hackl.
However, the biggest departures are Rio Caraeff, Magic Leap’s chief content officer, Aleissia Laidacker, the company’s head of developer experience, and Graeme Devine, the startup’s vice president of games and apps. “Today is my last day Magic Leap,” wrote Caraeff on Twitter. “I’m forever grateful for the amazing learning experience, and for being able to help and support so many talented developers and creative souls.”
Also, the company’s lead animator, David Wilson, confirmed that he along with the entire animation staff were also part of the layoffs. Other workers who confirmed their departure via Twitter were senior developer and technology engineer Shane Engelman, lead 3D artist Mouhsine Adnani, mixed reality designer Andrea Montoya, tech artist Josh Jones, Jim Vaughn (part of the Magic Leap Horizons team responsible for developing testing solutions for the U.S. Navy), innovation lead Naomi Augustine-Yee, animator Jonathan Mangagil, game developer Michael Woodard, developer evangelist Kedar Shashid, and senior site reliability engineer Andrew Knight.
The exact number of layoffs remains unclear, but a tweet from Laidacker indicates that roughly 1,000 employees have been released. Additionally, unconfirmed reports among insiders indicates that Magic Leap may have also let go of its entire contractor work force.
Within Abovitz’s note is a telling shift from the company’s previous strategy. Instead of gaming and entertainment, the company is becoming completely enterprise-centric.
“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,” said Abovitz.
“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.”–Rony Abovitz, CEO, Magic Leap
And while a focus on enterprise customers for a pricey ($2,295) AR headset like the Magic Leap 1 makes sense versus the competition represented by Microsoft’s HoloLens 2, up until now, Magic Leap has promoted itself as a mostly consumer-focused effort, pushing out elaborate and highly polished AR games and educational experiences in the last two years.
Alas, the combination of the high price of the device, along with the relatively small developer and user community around it, haven’t lead to significant sales. That lack of mainstream pickup is even more concerning when you consider Magic Leap’s partnership with AT&T as well as major app releases in concert with HBO’s Game of Thrones franchise, Lucasfilm’s Star Wars franchise, and the recent release of a Spotify app.
“Given the very difficult and challenging circumstances businesses now face, there is an increased need for technologies like ours and we are currently in the process of negotiating revenue generating strategic partnerships that underscore the value of Magic Leap’s technology platform in the enterprise market,” said Abovitz in his message posted to the company’s website.
The shift to become primarily enterprise focused will be bad news for the dedicated users who have adopted the device for entertainment, but it will be great news for Magic Leap’s investors. Nevertheless, it remains to be seen as to whether that shift came too late now that the entire tech industry is in the middle of an economic dip that could last deep into 2021 and beyond.
Cover image via Magic Leap