Magic Leap Cites COVID-19 In Layoff Notice After Report Of Slow Sales

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AR headset maker Magic Leap is laying off “a number of employees” in what it says is a response to the difficulties raised by the ongoing COVID-19 pandemic.

A blog post from company founder Rony Abovitz today stated that “recent changes to the economic environment have decreased availability of captial”, which has led the company to take “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,” Abovitz said.

After raising billions in investment, Magic Leap finally launched an AR headset, the Magic Leap One Creator Edition, to markets in 2018 for $2,300. Similar to Microsoft’s HoloLens, the device projected virtual images into the real world, which users can interact with using a motion controller or hand tracking. The kit is powered by an external processor the user attaches to their waist.

At launch, Magic Leap focused on attracting consumers, with new games and experiences from famous developers such as Insomniac Games. But a report from The Information in late 2019 stated that Magic Leap was well behind in sales targets, with a successor still “years away”. Shortly thereafter, the company announced it was now pivoting towards businesses, much like Microsoft’s HoloLens 2 does.

“Adapting our company to these new market realities and our increased focus on enterprise means we must align our efforts to focus on the areas of our business that advance our technology, ensure delivery of Magic Leap 2, and expand product-market fit and revenue generation,” added Abovitz in today’s blog. “This transformation also means that we must decrease investments in areas where the market has been slower to develop, providing us with a longer runway while retaining the ability to explore and build on future use cases when the market signals readiness.”



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