Valve today confirmed that the company laid off 13 full-time employees and an unspecified number of contractors. The layoffs are believed to have largely impacted the company’s VR hardware group.

Following news that some employees had been laid off at the company, Valve provided an official statement to Road to VR:

Last month, 13 full time employees were let go and a portion of our contractor agreements were terminated. It’s an unfortunate part of business, but does not represent any major changes at the company. We thank those affected for their contribution and wish them well in future endeavors.

Compared to the array of other major companies working in the VR space, Valve has a small number of employees—considering its influence in both gaming and VR—believed to number in the low hundreds. So letting go 13 employees (and an unspecified number of contractors) isn’t insignificant.

The statement came after information from a purported leaker was posted to Reddit suggesting that a large portion of Valve’s VR hardware team was let go.

Valve played a central role in the development of the technologies behind the HTC Vive, including the SteamVR Tracking system which the headset and its controllers employ. The company of course also operates the massively popular Steam game distribution service, which includes a marketplace of VR content and the SteamVR platform on which they run.

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Valve is known to be working on next-gen VR controllers called ‘Knuckles’, and purported leaks have pointed to the company working on a new VR headset. The company also previously stated that it is developing three VR games. If or how any of these projects (or other VR projects at the company) will be impacted by the employee and contractor terminations is unclear at this point, but the publicly announced projects (like Knuckles and the three VR games) seem safer than the purported VR headset which has not been confirmed by the company.

Emails reportedly received from Valve head Gabe Newell in response to questions about Valve’s VR direction in light of the layoffs reiterate that the company isn’t changing plans, and confirm that the three VR games are still in development. Road to VR hasn’t been able to verify the authenticity of the emails but has contacted Valve for clarification on ongoing VR plans.

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Ben Lang
Ben is the world's most senior professional analyst solely dedicated to the XR industry, having founded Road to VR in 2011—a year before the Oculus Kickstarter sparked a resurgence that led to the modern XR landscape. He has authored more than 3,000 articles chronicling the evolution of the XR industry over more than a decade. With that unique perspective, Ben has been consistently recognized as one of the most influential voices in XR, giving keynotes and joining panel and podcast discussions at key industry events. He is a self-described "journalist and analyst, not evangelist."
  • Tesla

    An absurd. First, they turn somebody ass to work for them on their project, then they fire people. Using people and their life as “tools”. Not moral.

    • Baldrickk

      We don’t know the details behind this. BUT you would think that VR should be a pretty important side to what Valve is working on right now… Raises questions, but I don’t think we can pass judgement when we know so little.

    • WyrdestGeek

      I mean — If it’s not moral, then neither is any other corporation ever.

  • Mateusz Pawluczuk

    Maybe it means their secret HMD is finally consumer ready?

    • FireAndTheVoid

      If they let people go who were responsible for the development of their HMD, then that tells me that they don’t plan on developing a follow-on HMD. That’s not good news either.

      • Jerald Doerr

        Not true….

  • 3872Orcs

    Nothing much too see here I guess. Looking forward to GDC. Maybe we’ll get some official news crumbs then.

  • mirak

    They were fired, not let go, because HL3 was not delivered on time.

  • 0x

    You’d hope they had figured out this issue by now, but maybe they realized that they have been stunting their development progress in moving the VR FPS forward by adhering dogmatically to the “anything which can cause motion sickness is not allowed” philosophy, which led them around in circles trying to make exploratory FPS gameplay work immersively without free locomotion, only to realize that the developers who are ignoring this limitation are the ones pushing VR gameplay where it needs to go. Maybe the software team became frustrated by the limits placed on them by the VR team, and now the company is course-correcting. Just some speculation born of my desire to experience a proper Valve single-player game with free movement in VR.

  • JesuSaveSouls

    Jesusvr.net

    • benz145

      If you aren’t adding to the conversation, please don’t be spamming random URLs.

  • oompah

    Slow cook a vr headset
    but cook it well

  • I don’t know what it does mean, but to me it sounds like some hardware project has been abandoned

    • brandon9271

      I REALLY hope not

  • Proof XR Lab

    Interesting comment from Valve hardware engineer Alan Yates (vk2zay) on reddit / r / valve forum

    “I am still at Valve, still working on VR R&D with the original core team and a bunch of people you’ve never heard about that have joined over the years.

    The rumor mill has been running overtime lately! As Gabe has confirmed, yes Valve let some people go. VR wasn’t the main group affected, it certainly wasn’t half the FTEs in hardware. As you can see from the jobs website we are still hiring for VR and other hardware-related skills.

    Does anyone really believe we would abandon a nascent media like VR, especially one we have such a significant position in? Hardware is of great strategic importance to our future, VR and otherwise, abandoning that capacity would be stupid.”

    • G-man

      valve doesnt really have such a significant position in vr though do they…when they have made one reference hardware that only htc and pimax has used. theyve been showing controllers for like 3 years now but we have nothing consumer to buy…
      We were told we could get steam vr 2.0 tech by december…2017. so far the only way to get it is to get ripped off by htc.

      • brandon9271

        I don’t know why more companies didn’t use “lighthouse” technology. Was there some ridiculously high licensing fee or does the hardware just cost a lot to build? I’m guessing the answer to both is “NO” if Pimax did it.

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    • WyrdestGeek

      Alan Yates’ words have the ring of truth to them.

  • G-man

    i hope so, but i dont see it happening.

  • Jerald Doerr

    (I’m making more assumptions here but it’s pretty obvious what’s going on)

    Just like the film industry but even more difficult for companies cost wise.. You leek project information and can’t catch the rat you just might have to put a tent over the hole location!

    At the end of the day its the rats fault! But I’ll say this… Was the leek so bad? Had I not found out Valve is actually making a HMD I might have wasted my money on a PiMax…… Oooops but Pimax has to license Valve VR tech so now I understand why it’s such a big deal….

    OH WELL, life goes on…

    • brandon9271

      Maybe the layoff was for financial reasons. You wouldn’t think so since Valve makes a fortune off of Steam sales.. then again, I guess they don’t like to waste money no matter how much they have.

      • Jerald Doerr

        I read up a bit more after posting and it looks like they dropped the whole AR thing…

        • brandon9271

          Well, if that’s it I’m good. I don’t think AR hardware is ready for prime-time.

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  • G-man

    So the plan is to not communicate with customers and hope to finish the product before everyone has lost interest and trust.

    • Jerald Doerr

      I kinda agree with yea but I can’t speak for Valve…. But yeah… That’s the plan… It’s not a Kickstarter buddy… Companies do it all the time but not for the reasons you believe as things are a lot more complicated than you might think..

      Sony and Microsoft for instance…. PlayStation 5, Xbox whatever… They don’t want to tell you it’s coming out for obvious reasons but the main one being (you’ll stop spending money on games or systems ) waiting for the new stuff.

      Anyway, just pray with me something will happen on the March 22… Because I’m sick of waiting for something other than the Pimax and if Valve speaks nothing of a new VR Unit I will put my cash down on a frickin PiMax…