Burn down 20 billion! ByteDance explodes "big retreat"!

ByteDance announced a large-scale layoff of its Pico business, which means that ByteDance is conducting a "big retreat". At the recent staff meeting, Pico President Zhou Hongwei announced the organizational structure adjustment plan, which will adjust the personnel of Pico's market, games, video, live broadcast and other teams, and integrate Pico's mobile OS team into the ByteDance product development and engineering architecture platform

ByteDance announced a large-scale layoff of its Pico business, which means that ByteDance is conducting a "big retreat". At the recent staff meeting, Pico President Zhou Hongwei announced the organizational structure adjustment plan, which will adjust the personnel of Pico's market, games, video, live broadcast and other teams, and integrate Pico's mobile OS team into the ByteDance product development and engineering architecture platform. According to internal employees, layoffs are expected to account for 80% and the number of employees will be reduced to around hundreds. This layoff is not Pico's first encounter with layoffs. Earlier this year, Pico had already laid off most of its sales team. However, despite Pico's business growth, the entire AR/VR industry has experienced a cliff like decline. According to data from Lotu Technology and IDC, the sales of VR/AR devices have both experienced a significant decline. Against this backdrop, even Pico's crazy spending makes it difficult to have a future. According to 36 Krypton, ByteDance sharply reduced the sales volume of Pico from 1 million to 500000 in 2023, which is one of the reasons why Zhang Yiming suddenly decided to "retreat". In addition to Pico, other major domestic and international companies have also abandoned their metaverse business lines.

Tencent disbanded the XR team in February of this year, and Microsoft and Meta also made layoffs and cost reductions. This shows that the scientific and technological foam blown by capital is collapsing, and the meta universe project is experiencing "valuation killing". Why did ByteDance suddenly lose patience with Pico business at this critical moment? Firstly, Pico's business burns too much money. The cumulative investment of ByteDance in Pico may have reached about 20 billion yuan. Every time a Pico device is sold, it will lose about 1000-3000 yuan. Despite Pico's business growth, the entire industry has not experienced a major explosion. Therefore, investing in Pico business has become a burden. Secondly, the global technology trend is undergoing significant changes, with the strong entry of artificial intelligence big models, replacing the VR/AR track as a new hot field. Domestic and foreign giants have laid out AI big models, while VR/AR tracks have been abandoned by capital. According to data statistics, the global VR/AR investment and financing amount has plummeted, and the number of investment and financing events has also decreased. This indicates that the VR/AR industry has entered a cold winter and has become a hot topic in the past. Under such circumstances, ByteDance decided to make a "big retreat", which seems to be a wise decision.

However, does this mean that the entire AR/VR industry has no prospects? Perhaps not so. Although the entire industry is currently at a low point, with the continuous progress of technology and the growth of user demand, the AR/VR field still has huge potential. It can be foreseen that as technology becomes more mature and applications become more diverse, AR/VR will usher in new development opportunities. For ByteDance, it may be wise to give up Pico business, but we also need to consider the future development trend. In addition to organizational restructuring and layoffs, ByteDance should focus on the future and continue to actively explore new business directions to maintain the competitiveness of the company. At the same time, ByteDance should also strengthen the management and care for employees to ensure that the layoff process is fair and reasonable, so as to reduce the harm to employees. Finally, as a reader, what do you think of the "big retreat" of ByteDance? Do you think there is a future for the AR/VR industry? Please leave your comment and share your thoughts with us.

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