ByteDance’s virtual reality unit Pico pushes new round of job cuts in restructuring move amid falling demand for headsets

Pico, a virtual reality (VR) headset manufacturer owned by ByteDance, is implementing a new round of job cuts as part of a restructuring process. This comes as the company's sales in mainland China and overseas markets have been underperforming this year. Pico's founder and CEO, Henry Zhou Hongwei, informed employees that the company had overestimated the growth of the VR headset market, leading to the need for staff reductions. The mobile operating system team at Pico will be integrated into ByteDance's product development group, where they will concentrate on research in core technologies and other hardware.

Earlier this year, Pico had already carried out a round of layoffs that affected hundreds of employees, with some teams being reduced by as much as 30 per cent. This latest restructuring effort by Pico highlights another sluggish year for the global shipments of augmented reality (AR) and VR headsets. According to a report by tech research firm IDC, global AR and VR headset shipments have declined for the fourth consecutive quarter, with volumes falling 44. 6 per cent year on year. The global economic downturn has suppressed demand, while a price increase on the popular Quest 2 headset, developed by Meta Platforms' Reality Labs, has further stunted growth in this market.

In a statement released on Tuesday, Pico did not comment on the job cuts but indicated that the company will continue to sell its flagship Pico 4 headset and provide services to consumers amid its restructuring initiative. Pico, which was acquired by Beijing-based ByteDance in 2021, launched its Pico 4 headset in 2022. At the time of the Pico 4's launch, Zhou told Chinese media that the company anticipated selling more than 1 million units of the headset. However, Pico's struggles contrast with Apple's build-up for its Vision Pro mixed-reality headset, which is expected to go on sale in the US early next year.