As businesses around the world struggle to adapt to unprecedented change, we too have had to examine the way our company operates. The recent changes to the economic environment have decreased availability of capital and the appetite for longer term investments. While our leadership team, board, and investors still believe in the long-term potential of our IP, the near-term revenue opportunities are currently concentrated on the enterprise side.
To better prepare Magic Leap for the future, we have taken a close look at our business and are making targeted changes to how we operate and manage costs. This has made it necessary for us to make the incredibly difficult decision to lay off a number of employees across Magic Leap. This has been a painful process, as every member of our Magic Leap team has demonstrated not only unparalleled talent but a true passion for our company's mission. But after lengthy, careful consideration, I have determined this is ultimately necessary to give us the best chance for future success. These changes will occur at every level of our company, from my direct reports to our factory employees.
Adapting our company to these new market realities and our increased focus on enterprise means we must align our efforts to focus on the areas of our business that advance our technology, ensure delivery of Magic Leap 2, and expand product-market fit and revenue generation. This transformation also means that we must decrease investments in areas where the market has been slower to develop, providing us with a longer runway while retaining the ability to explore and build on future use cases when the market signals readiness.
What we have accomplished together, over the past years, is the result of incredibly hard work and more than one minor miracle. We have created new science, bent the laws of physics, created amazing, imaginative new worlds, and brought people from across the globe together around a singular belief - that we can create technology in service of humanity. I am always amazed by what our team has created, and we would not be here without every employee who joined us on this mission.
One of the things that makes Spatial Computing special is its ability to bring people closer together, to amplify their unique talents, and to create limitless opportunities for digital experiences to enhance how we live and work. When we started Magic Leap we knew we needed to make something that was able to be worn all day, every day, by everyone. We believed that people should not have to adapt to technology - the purpose of technology should be to serve us, to make the things that are uniquely great about you, even better. We drew on expertise from years in biomedical engineering and health sciences to create an entirely new technology platform and IP portfolio.
Given the very difficult and challenging circumstances businesses now face, there is an increased need for technologies like ours and we are currently in the process of negotiating revenue generating strategic partnerships that underscore the value of Magic Leap’s technology platform in the enterprise market.
The post-COVID economy will be one of resiliency and the ability for businesses to operate across vast distances and connect with their customers in ways that mimic physical interactions, but benefit from the speed and scale of high-speed networks, will be critical. Spatial computing will very much be part of that coming economic change. Magic Leap’s pioneering work in the field provides us with a rich platform of technology and know-how to help usher in this era of Spatial Transformation.
A reduction in our team is not the news I had hoped to share with you today. Looking back at where we started and how incredibly far we’ve come, it is clear that none of that would have been possible without all of our Leapers, past and present.
A few years ago we went through the exercise of defining our company’s core values. We carefully considered what was important to us, we reviewed case studies of what other companies had done, but in the end, we just looked around. We looked at all of our Leapers. All the beautiful, unique, and wonderful things they all inspire us with every day - and we came to the Magic Seven - Fearless Curiosity, Move With The Speed Of Light, Get It Done, Magic In The Details, Own Your Superpower, Together With Love, and Indomitable Spirit. Today the indomitable spirit of our Leapers stand out to me more than ever. Each of them is so incredibly talented and passionate. They have pushed us to be better, helped their friends and colleagues when they needed it, and believed in the power of technology to transform.
This is a time of change and sadness, of deep challenges, but also a way forward to the future. Our team are leaders and dreamers, creators and catalysts for positive change. It has been my great privilege to work with them - they have brought good technology, creativity, and a positive feeling to the world.
I want to thank each member of our team for taking the leap of faith to be part of bringing Spatial Computing to the world. We are at the beginning of a long journey, and I expect that great things will come from the team that continues on with Magic Leap, and I also expect great and wonderful things from those who are leaving us now. Their warmth, brilliance, creativity, and experience will be deeply missed.