Despite all of the hype and excitement surrounding virtual reality over the past couple of years, the market for VR has not grown at the pace Nokia had anticipated or hoped it would. As a result, the company has decided to ‘optimize’ its investments in VR, starting with halting development of Ozo, a 360-degree VR camera that debuted at $60,000 before receiving a price cut to $45,000. The company is also reducing its workforce as it pivots to digital health.
“Nokia Technologies is at a point where, with the right focus and investments, we can meaningfully grow our footprint in the digital health market, and we must seize that opportunity,” said Gregory Lee, president of Nokia Technologies. “While necessary, the changes will also affect our employees, and as a responsible company we are committed to providing the needed support to those affected.”
Nokia said it expects to layoff up to 310 employees, accounting for nearly a third of its total workforce. The layoffs will mainly affect employees in Finland, the United States, and the United Kingdom. Nokia has already begun the initial process of handing out pink slips, having invited employee representatives in Finland to negotiate what we presume are severance packages. It is not clear if Nokia is offering to re-position any of its affected employees.
Looking ahead, Nokia’s plan to reinvigorate its bottom line is to focus less on hardware development and more on growing its brand and licensing its technologies, particularly in the digital health field. At the same time, Nokia is not giving up completely on VR—the company sill plans to make “optimized investments” in the category, though it did not elaborate on exactly what it has in mind.
As to existing Ozo owners, Nokia says it will “maintain commitments” to those customers, which probably points more towards warranty and support rather than coming up with new features. That is going to be a tough pill to swallow to anyone who spent tens of thousands of dollars on Ozo under the expectation that Nokia would stay invested in its VR camera.