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Lytro Cuts Jobs, Raises $50 Million in Shift Toward Virtual Reality and Video (Exclusive)

The company plans to cut between 20 percent and 40 percent of its current workforce as it staffs up in new, potentially more lucrative markets.

Eric Cheng

Workers at Lytro got a mixed bag of news on Wednesday, with the photography startup telling employees both that it has raised a further $50 million, but also that it intends to cut a significant chunk of its workforce.

Lytro plans to use the new funding to make a strategic shift, taking its signature light-field technology into new areas, including video and virtual reality.

“We are going to have to make some cuts in some areas so we can staff up in some new ones,” CEO Jason Rosenthal told Re/code. “Fifty million dollars is a nice big number, but it is not unlimited. We had to make some pretty tough decisions.”

Details of the layoffs were still being finalized as of Tuesday evening, but the company is expected to cut somewhere between 25 and 50 people from its 130 person workforce, while at the same time looking to hire those with expertise in the new areas that were not previously of focus for the company.

The funding is being led by new investor GSV Capital and includes participation from all of Lytro’s existing investors along with Allen & Co. and Danhua Capital. It values the company at five times its last financing round, Rosenthal said.

Rosenthal said the market for virtual reality devices is booming, and while it is easy to display computer-generated content on such devices, it remains difficult and expensive to capture real-world imagery.

“Light-field is really the perfect solution for this,” Rosenthal said.

Lytro has tried a number of different approaches to find a lucrative home for its dramatically different approach to photography since it first unveiled the technology in 2011. The first product, which arrived in 2012, was a mid-range consumer camera whose prime selling point was the ability to take “living pictures” that could be refocused after capture. Its second-generation product, the Illum, debuted last July and was targeted more at professionals and high-end photo enthusiasts, offering higher-resolution living pictures as well as a fast zoom lens, albeit with a steeper price.

The company isn’t giving up on the photography market, with Rosenthal saying that additional features will come to the Illum via software updates this year and a third-generation, higher-resolution camera technology planned for release next year.

Late last year, founder and Chairman Ren Ng announced he was leaving full-time work at Lytro to take a professorship at the University of California, Berkeley.

This article originally appeared on Recode.net.