AR unicorn Magic Leap is again pivoting its core business, this time to serve as a waveguide supplier to other companies making AR glasses, something that we’ve learned comes amid a mass lay off nearly 200 of its core engineering and product development staff.
According to a formal WARN Act notification letter to US government officials last week, the company is set to lay off 193 employees at the company’s Plantation, Florida headquarters.
A wide range of product development and engineering roles are set to be affected come October 1st, the letter reveals, including software, hardware, UX/design, product management, manufacturing engineering, quality, technical program management, and several senior engineering and executive leadership positions.
Although it’s uncertain how many will remain at Magic Leap—estimates point to a few hundred at this point—the mass layoff comes amid a broader shift at Magic Leap, as the company announced earlier this month its was undergoing a “strategic pivot to accelerate the development of AI display glasses.”
The company says it’s now shifting from building first-party AR headsets to taking on the role of “essential AR ecosystems partner, waveguide supplier, and device integration expert for the technology industry.”
“Magic Leap is seizing the moment where our AR innovation and manufacturing expertise create the greatest market impact,” said Scott Carden, SVP of display engineering and manufacturing at Magic Leap. “We’re solving the toughest challenges of scaling waveguide production, from industry-leading waveguide performance to manufacturing and full-device integration. Now, we’re using our unmatched expertise to help partners bring AI display glasses to millions of consumers in the fastest way possible through our waveguide technology.”
Founded in 2010 by Rony Abovitz, Magic Leap is arguably the most well-funded AR startups to date, having massed well over $4 billion in funding from investors including Saudi Arabia’s sovereign wealth fund, a majority holder at over $1 billion invested, as well as Google, Alibaba, and Qualcomm.
Despite an enviable runway, the company’s first AR headset didn’t exactly live up to the hype. Released in 2018, Magic Leap 1 awkwardly straddled the consumer and enterprise segment at the (then unthinkable) price of $2,300, essentially forcing the company to pivot and drop its consumer ambitions a short two years later. That first pivot away from consumer also marked the departure of CEO and co-founder Rony Abovitz, with its follow-up device Magic Leap 2 released in late 2020 solely targeted at enterprise.
And while Magic Leap has only just announced its waveguide optics pivot, in reality the company was making moves away from first-party devices as early as July 2024, according to a Bloomberg report, which characterized the action as a last ditch effort to make use of the company’s AR optics tech.
Meanwhile, we’ve heard substantially nothing about development of first-party devices, as over the past two years the company has only announced a hardware partnership with Google and manufacturing partnership with Taiwan’s Pegatron, both of which center around licensing and manufacturing waveguides.
