News reports have surfaced online that Chinese extended reality (XR) firm Pico Interactive is set to lay off “thousands” of employees across its operations.
Tencent Technology News revealed in a report on Monday that the redundancies were “widespread and are expected to affect thousands of employees.”
Additionally, the news report found that the ByteDance-owned virtual reality (VR) enterprise had begun communicating with its affected employees about compensation.
According to previous reports, Pico’s total workforce had “exceeded 2,000 at its peak” but had faced waves of layoffs hitting 20 to 30 percent of its employees in 2023.
Following this round of job cuts, the company’s employee headcount will remain “in the hundreds,” it added.
Tencent Technology News added,
“In mid-October, there were rumors that PICO [had been] abandoned by ByteDance’s strategy. A number of PICO’s internal executives, including Ren Lifeng, PICO’s Vice President and Head of Content and Culture [were] transferred or resigned. News of layoff plans also came out, but this was denied by [ByteDance].”
Acquisition Triggers Competition
The news comes after ByteDance, the company behind the developments, bought out Pico Interactive in 2021 to compete with major manufacturers like Meta Platforms and HTC VIVE.
The company later pivoted to enterprise use cases with its Pico4 Enterprise Edition headset. Later on, it began selling the Pico4 to Europe-based consumers and Pico4 Enterprise to square off with the Quest 2.
However, the company aimed to win some of Meta’s developer base to port hit titles from the Quest Store to ByteDance’s PICO Store. To do this, it began funding developers to complete the task, but later, fresh reports found that Pico sales had begun bottoming out due to missed sales targets.
According to UploadVR, citing Chinese news site Sina Technology, “multiple insiders” at the Beijing, China-based company stated that the PICO buyout had triggered “factional disputes” between original staff members and incoming ones.
Furthermore, the company had been reportedly losing in headset sales roughly $140 USD per unit. The company has also failed to launch its biggest exclusive from Ubisoft, ‘Just Dance VR,’ leading to additional headaches for the embattled firm.
Further issues have surfaced due to ongoing competition with the Meta Quest 3 and upcoming Apple Vision Pro headsets. Both companies aim to conquer the XR consumer and enterprise markets, with the former following up with its widely-acclaimed Quest 2 and the latter just entering the XR space.
Hand Tracking, OS Updates to Pico4 Headset
Despite this, the company has been updating a few specifications under the hood of the Pico4 and Pico Neo 3, including its operating system (OS) version 5.7, hand tracking, and other functionality.
For the company, it had improved algorithms used to boost hand-tracking capabilities by reducing errors. The upgrade helps to correct hand jitter and additionally, aims to boost its controllerless input functionality.
Further hardware upgrades include its Mixed Reality Capture app, which now informs users when they have begun recording footage in their headsets.
FitXR: A Use Case in Sustainable App Development
Pico developers confirmed some of the features of these upgrades in the release of FitXR, a virtual reality fitness app on the PICO Store. At the time, Phil Baker, Vice-President of Engineering, FitXR, explained to XR Today how Pico had supported the development of his hit title.
He also commented on creating sustainable app development processes for the Pico4, leading to XR ecosystem growth over time. Incentivising app development could “bring a broader selection of apps more rapidly and with overall greater variety, experimentation, and eventual utility.”
Such efforts “can bootstrap a critical expansion of users,” he concluded, adding: “There’s always a disruptive benefit from sponsoring innovation, and incentives will always have a role there.”
He added in his interview: “Still, using incentives to drive user scale at this particular moment, in time will ultimately be the long-term benefit to XR.”
