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    ByteDance’s VR Arm Pico to Downsize, Fold Mobile OS Team Into Parent Firm

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    (Yicai) Nov. 7 — ByteDance’s virtual reality division Pico will make major personnel changes in its marketing, gaming and video departments to support its mobile operating system as global demand for VR products declines. The plan is to integrate the team into the parent company.

    The plan is described in an internal document obtained by Yicai from Beijing-based Pico today.

    ByteDance, which owns TikTok and its Chinese sister app Douyin, acquired Pico in September 2021 amid growing expectations for VR headsets. Pico’s workforce has grown rapidly from 200 to 2,000, with overseas employees accounting for about 30 percent.

    But since the beginning of this year, Pico has laid off 20% to 30% of its employees, and there are rumors that ByteDance may downsize the division and abandon the Metaverse idea.

    Pico has a patient and long-term outlook for its augmented reality business, a company representative told Yicai today, adding that operations will continue as usual even after the latest changes.

    According to Internet investor Zhuang Minghao, the market initially had high hopes for VR products as the next iPhone phenomenon. However, looking at shipments, product development, and technological advances, Zhuang points out that these products have not yet reached a satisfactory level.

    According to the latest statistics, global VR shipments in the first half of the year decreased by 39% compared to the same period last year. China’s VR headset shipments fell by 56%, ending a two-year period of growth from 2021 to last year.

    Against the backdrop of declining demand, many companies in the VR space made internal adjustments this year and took a wait-and-see attitude.

    In February, Chinese internet giant Tencent Holdings laid off the team responsible for developing its own augmented reality hardware. That same month, Microsoft disbanded the Industrial Metaverse team and laid off 100 staff members working on the project. Chinese video platform Kuaishou has also suspended related operations, and Ma Yingwu, head of Metaverse business, has also resigned.

    Editor: Futura Costaglione

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