Pico is laying off a large number of employees as it works to "restructure" its business.
Update November 7: Reuters released a second report, while ByteDance confirmed that layoffs were taking place but denied the claimed scale, and provided a statement.
Tencent Technology News reports that these layoffs are "widespread and are expected to affect more than a thousand employees", bringing Pico's workforce down to just "hundreds" compared to the peak of around 2000. We should note that Tencent is a competitor to ByteDance.
Separately, Reuters reports that Pico will keep its hardware team, but that most of the software team will be "folded back into" ByteDance, citing three sources. Pico's CEO Zhou Hongwei reportedly told staff "the VR industry remains in a very early stage" and "estimation for the industry and market growth was too optimistic as growth did not go as fast as expected".
ByteDance confirmed to UploadVR that layoffs were taking place, but denied that more than a thousand staff were affected, though it declined to say exactly how many were. It provided the following statement:
“We frequently assess our business needs and make adjustments to strengthen our organization and better align our teams with company goals. As a result, we have decided to restructure the PICO business to focus more on hardware and core technologies."
If you're not aware, ByteDance is the Chinese tech giant behind TikTok, and in mid 2021 it acquired the Chinese VR headset startup Pico. While Pico previously focused mainly on businesses, less than a year after the acqisition it launched its existing headset to European consumers as a beta test, then a few months later launched Pico 4 with superior specifications to Quest 2 at the same price.
Pico 4 had dual 2K displays and pancake lenses a year before Quest 3, and the headset is priced between Meta's headsets, effectively acting as a midpoint option. Pico 4 isn't sold in North America though, amid reported regulatory scrutiny of TikTok. And while ByteDance has funded developers to port over a large percentage of the major Quest Store content, it is still missing Meta's standalone exclusives like Beat Saber, Resident Evil 4, Population: ONE, and Onward.
Just one month after Pico 4's launch Chinese news outlet Sina Technology released a report citing “multiple insiders” at Pico claimed sales weren't meeting expectations. The report also claimed the ByteDance acquisition had led to “factional disputes” between original employees and new staff added by the tech giant, and included an estimate that ByteDance was losing around $140 per headset sold.
Pico's one major exclusive, Ubisoft's Just Dance VR, has yet to ship or even to get a release date despite being slated for "2023", and the company hasn't announced any other major exclusive titles.
We recently reported that Pico was shifting the majority of its content funding from controllers to controller-free hand tracking content. It's possible that ByteDance may aim its next hardware at competing with Apple Vision Pro, not Meta Quest. We'll have updates as soon as we learn more.