San Francisco-based tech company Niantic, known for developing Pokémon Go, is laying off dozens of employees following a recent $3.85 billion deal. Earlier this month, Niantic announced it was splitting into two distinct entities: its video game division, acquired by Scopely (owned by Saudi Arabia’s Public Investment Fund), and a new geospatial technology firm called Niantic Spatial.

According to a WARN notice filed with state officials, 68 employees from Niantic’s Ferry Building headquarters will be affected by the layoffs, scheduled to take place in phases on May 20 and June 15. Among those being let go are key executives, including the chief technology officer, chief financial officer, a vice president, general counsel, and several directors and software engineers.

Niantic CEO John Hanke addressed the layoffs in an email to staff, describing the move as essential for the new company’s leaner structure. He emphasized that Niantic Spatial will operate like a startup and said the layoffs do not reflect employees’ performance. Hanke will lead the new venture, which has $200 million in funding from Niantic and an additional $50 million investment from Scopely.

Niantic’s pivot toward geospatial technology builds on its experience developing augmented reality (AR) features for games like Pokémon Go, Pikmin Bloom, and Monster Hunter Now. The AR tech overlays game characters onto real-world environments captured by players’ smartphone cameras. The company has also used real-world scans to train AI models capable of understanding physical spaces.

Niantic Spatial aims to leverage this expertise beyond gaming, with potential applications in warehouses, remote collaboration, and machine vision technologies for smart glasses and humanoid robots, as highlighted on its website.

When asked whether Niantic Spatial would retain access to Pokémon Go user data or if additional layoffs were planned outside San Francisco, Niantic spokesperson Jonny Thaw did not provide a response.