The AR start-up Magic Leap is cutting about half of its workforce as part of a major restructuring, people familiar with the matter told Bloomberg. About 1,000 employees will be affected, as the company winds down its consumer business in order to focus on enterprise market.
Magic Leap confirmed the change in strategy in a statement posted on its website. The company said the shifting economic climate has reduced investor appetite for longer term investments. While the company still believes in the long-term potential of its product, "the near-term revenue opportunities are currently concentrated on the enterprise side", said CEO Rony Abovitz.
The decision follows similar moves by HTC Vive and Microsoft to focus their mixed reality products on enterprise users, as consumer adoption of the devices was slower than expected.
According to the Bloomberg report, Magic Leap is also considering taking on new outside investment as well as a partnership with a large health-care company to drive revenues. The news agency previously reported that Magic Leap was in talks for new financing which could value the company at over USD 10 billion.
Its existing investors include NTT Docomo, Saudi Arabia’s sovereign wealth fund PIF, Singapore’s state-owned investment company Temasek and AT&T.
