In August 2023, iQiyi Smart, the VR equipment subsidiary of streaming giant iQiyi Inc., underwent significant layoffs and financial distress as the broader metaverse hype faded. The company, operating in the competitive VR hardware industry, had conducted multiple rounds of downsizing over the preceding six months, reducing its total headcount to below 100 employees. In some departments, the layoffs reached as high as 50% of the staff. This restructuring was driven by the startup's struggle to achieve profitability and mainstream adoption in a sector that has yet to gain widespread consumer traction. Concurrently, the company had been delaying or withholding salary payments to employees since March 2023, highlighting its severe cash flow challenges.
