ByteDance’s Virtual Reality Arm Pico Cuts Jobs Amid Slump in Global VR Demand

by Alisa Davidson

Published: November 07, 2023 at 3:24 am Updated: November 07, 2023 at 3:25 am

by Victor Dey

Edited and fact-checked:
November 07, 2023 at 3:24 am

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In Brief

Pico has announced plans to reduce its workforce, reportedly saying that hundreds of jobs will be affected at the VR company.

The China-based virtual reality division of ByteDance —- Pico has revealed plans to reduce its workforce, without specifying the exact number of jobs to be affected, although it is allegedly to be in the “hundreds.”

The move marks the most significant restructuring since its acquisition by the company behind TikTok two years ago.

The company aims to restructure its business, emphasizing a shift toward hardware and core technologies. Pico said that it intends to retain its hardware team, while a significant portion of its software team will be integrated back into ByteDance’s own product development team.

The reorganization represents a setback for ByteDance. Its acquisition of Pico in 2021, valuing the VR company at over $1 billion, was viewed as ByteDance’s endeavor to compete with Meta Platform’s Quest line of VR headsets. Despite recent announcements suggesting ByteDance’s plans to gradually wind down Pico, the company emphasized last month that it remains dedicated to the long-term prospects of the VR industry.

Layoffs Gripping The VR Domain

Recently, Meta announced plans to lay off employees in the unit of its metaverse-oriented Reality Labs division. Comprising around 600 employees, the unit was dedicated to creating custom chips that enhanced Meta’s devices, enabling them to execute distinct tasks and function more efficiently. This specialization set Meta’s offerings apart from those of other competitors entering the emerging AR/VR market.

In spite of the decline in VR demand this year and the consecutive decrease in AR and VR headset shipments over the past four quarters, as reported by the IDC, Pico has been actively extending its reach both domestically and internationally.

Within China, Pico has emerged as the top VR producer in terms of total shipments, and on a global scale, ranking second only to Meta.