In April, reports claimed that Magic Leap would be cutting 1,000 jobs due to complications caused by Covid-19, which would’ve been about half of its workforce. Magic Leap is hardly the only company to lay off employees amidst this crisis, but given its lack of critical or commercial success to date, it was likely a particularly tough pill to swallow.
Fortunately for both Magic Leap and its remaining employees, they’ve all been granted a stay of execution. A new report from Business Insider claims that Magic Leap CEO Rony Abovitz managed to secure $350 million in additional funding, which has allowed the company to press pause on its layoff plans.
This information was revealed to Magic Leap employees via a memo sent out by Abovitz himself. The following excerpts summarize the situation:
I am very happy to report today that we have secured financing for Magic Leap – and that we have closed the first phase of that investment and commitment today. The $350mm investment is led by current major investors in Magic Leap, as well as new investors. We are also working on closing possible additional investment in the coming weeks…
…Today, as we have secured financing, we are also formally withdrawing the conditional WARN notice that was sent to you on April 22, 2020, otherwise there are no changes to the terms of employment and we look forward to continuing normal operations.
We’re not sure which investors Magic Leap turned to for assistance during these trying times, but according to the memo, the funding came from both new and existing sources. Business Insider notes that corporations like Google, AT&T, Alibaba, and Warner Bros already have stakes in the company, so perhaps they chipped in some additional cash.
It’s not clear how many of the 1,000 employees previously slated for termination are still left at Magic Leap HQ. However, $350 million is a sizable cash infusion, and for the sake of Magic Leap’s workers, we hope it’s enough to carry the company through the Covid-19 pandemic without any further reductions to the ranks.