Magic Leap, an augmented reality startup with financial backing from AT&T, Google and others, said it will layoff some employees due to coronavirus-related business impacts.
The company announced the layoffs in a blog post but didn’t specify how many employees across the company will be affected.
“This has been a painful process, as every member of our Magic Leap team has demonstrated not only unparalleled talent but a true passion for our company's mission. But after lengthy, careful consideration, I have determined this is ultimately necessary to give us the best chance for future success. These changes will occur at every level of our company, from my direct reports to our factory employees,” wrote Rony Abovitz, CEO and founder of Magic Leap.
Abovitz said recent changes to the economic environment have decreased availability of capital and the appetite for longer term investments. He said there’s still long-term potential of Magic Leap’s IP, but the near-term revenue opportunities are currently concentrated on the enterprise side. That shift in focus to enterprise applications will help the company make sure it can deliver Magic Leap 2 and expand its product-market fit and revenue generation.
The company said it’s currently in the process of negotiating strategic partnerships that put to use Magic Leap’s technology platform in the enterprise market.
The layoffs and enterprise priorities for Magic Leap will likely put on hold consumer applications for the company’s AR technology. One of Magic Leap's most active partners in developing consumer applications has been AT&T. The company launched an app for its virtual MVPD AT&T TV Now on Magic Leap headsets and in 2018, AT&T announced plans to launch a wireless 5G test zone on Magic Leap’s corporate campus in Florida.