ByteDance’s VR division, Pico, is undergoing significant layoffs, with reports indicating that the restructuring will impact more than half of its workforce. This development follows market challenges and reassesses ByteDance’s strategic direction within the virtual reality sector.
Key Highlights:
- Pico, a ByteDance company, is reportedly laying off a large portion of its staff.
- Layoffs come as part of an organizational restructuring plan.
- The workforce reduction is expected to bring numbers down from over 2,000 to just hundreds.
- ByteDance acquired Pico in 2021, positioning it as a contender against Meta’s VR lineup.
- Pico’s VR headset, Pico 4, launched with competitive features but faced market challenges.
Pico, once a beacon of ByteDance’s venture into virtual reality, has reportedly initiated a sweeping layoff plan that’s poised to reduce its workforce significantly. Tencent Technology News suggests that the layoffs are extensive, with the potential to affect thousands of employees, reducing Pico’s team from a peak of roughly 2,000 to mere hundreds.
On November 7th, Pico confirmed the rumored layoffs in a company-wide meeting, indicating that this year’s adjustments were insufficient and untimely. The company’s optimistic estimates of market development had not aligned with the slower-than-expected real growth. The restructuring includes scaling down teams across market sales, service, studio, video, and platform operations.
Pico, which launched its VR headset, the Pico 4, to compete with Meta’s Quest line, has faced regulatory scrutiny and a lukewarm market response. The Pico 4 boasted superior specifications, but its sales did not meet expectations, and the company faced internal strife post-acquisition.
Despite the layoffs, Pico’s CEO Zhou Hongwei expressed a long-term perspective for the XR business, with a continued focus on hardware and core technological breakthroughs. The layoffs have been attributed to a global decline in VR demand, with VR and AR headset shipments decreasing significantly. Pico will retain its hardware team but will integrate much of its software team back into ByteDance’s own product development teams.
The global demand for VR headsets has declined, with IDC data revealing a 44.6% drop in shipments in the second quarter year-on-year. Pico, a dominant player in China and a significant global competitor, is now reevaluating its approach to developing its brand and products amidst these shifts.
The restructuring is a notable shift for ByteDance, which had invested over $1 billion in Pico, signaling its intent to challenge Meta in the VR space. Despite current challenges, ByteDance has reaffirmed its long-term commitment to the VR industry, suggesting that Pico’s story is far from over, albeit heading in a new direction.
ByteDance’s Pico is facing a watershed moment with reported layoffs affecting a significant portion of its workforce. The layoffs are part of a broader restructuring strategy amidst recalibrating market expectations and strategic priorities. While Pico refocuses on hardware and core technologies, the VR market’s overall slowdown has necessitated a pivot in ByteDance’s ambitions. As Pico adjusts to the new realities of the VR landscape, the industry watches closely to see how these changes will shape the future of VR content and technology.
