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Pico Interactive
February 16, 2023
June 14, 2024

Pico Interactive Layoffs: What Happened & Why?

In February 2023, Pico Interactive, a China-based VR headset company acquired by TikTok parent ByteDance, announced plans to lay off hundreds of employees as it shifts focus from software to hardware. This decision is expected to impact teams focused on sales, videos, and platform operations. In this article, we'll discuss what led to these layoffs, why Pico is changing its strategy, and the potential future impact on the company and the industry.

Why did Pico Interactive have layoffs?

One of the main reasons behind Pico Interactive's decision to lay off hundreds of employees is the company's shift in focus from sales, videos, and platform operations to hardware and core technologies. Pico's CEO Zhou Hongwei stated that the VR industry is still in its early stages, and the company's estimation for industry and market growth was too optimistic. This change in strategy led to internal restructurings, with Pico keeping its VR hardware team while folding much of its software team back into ByteDance's product development team.

Another contributing factor to the layoffs is Pico's failure to meet sales expectations. The company faced declining sales, losing approximately $140 USD per unit sold, and failed to launch its biggest exclusive title from Ubisoft, 'Just Dance VR.' Furthermore, Pico encountered stiff competition from Meta Platforms and HTC VIVE in the XR consumer and enterprise markets. These challenges, combined with ByteDance's abandonment of Pico's strategy and subsequent internal executive transfers and resignations, ultimately led to the mass layoffs at Pico Interactive.

Financial Impact and Future Directions

The layoffs at Pico Interactive are expected to lead to cost savings for the company, impacting its financial health in both the short and long term. Although the company has not publicly disclosed the reasoning behind their decision, it is likely these layoffs are part of a broader strategic shift. Following the layoffs, Pico Interactive is restructuring its business to focus more on hardware and core technologies. This shift is aimed at better positioning the company for future success in the VR industry.

Impact on Industry

The layoffs at Pico Interactive may signal a shift in the VR industry, as companies prioritize hardware development over software. This could result in a slowdown of new VR content and applications. Pico's future prospects remain uncertain, with its entrance into the US market still pending and a focus on hardware and core technologies.


Pico Interactive's layoffs stem from a shift in focus to hardware and core technologies, failure to meet sales expectations, and competition from Meta Platforms and HTC VIVE. The company's future remains uncertain, with potential impacts on the VR industry as hardware development takes precedence over software. These developments could lead to a slowdown in new VR content and applications, and Pico's next steps will be crucial in determining their standing in the market.