Tech giant Microsoft continues its workforce optimization, leading to significant layoffs. Confirmed by the company, over 1,000 employees, including those in mixed reality teams, will be let go. Last year, Microsoft also undertook massive layoffs, cutting 10,000 jobs. This time, the focus is predominantly on the mixed reality division.
Restructuring the Mixed Reality Organization
A Microsoft spokesperson announced a restructuring within the mixed reality organization. Known for developing military HoloLens headsets for the U.S. Department of Defense’s IVAS (Integrated Visual Augmentation System) program, Microsoft remains committed to this project, promising to deliver cutting-edge technology. Additionally, the company emphasizes its ongoing investment in W365 to expand its mixed reality hardware ecosystem and continues to sell HoloLens 2.
Changes in the Hardware Portfolio
During last year’s significant layoffs, CEO Satya Nadella highlighted changes in the company’s hardware portfolio. Since then, Microsoft has completed the acquisition of Activision-Blizzard, invested heavily in AI with OpenAI, and recently launched the Copilot Plus PC brand with Qualcomm chips. While the current layoffs primarily affect the mixed reality unit, a few hundred employees in the Azure division are also being let go.
Future of Mixed Reality Investments
Microsoft’s investments in mixed reality appear to be significantly scaled back. HoloLens 2, launched in 2019 with high expectations, will still be sold, but there is no mention of a new version. A few months ago, the company phased out Windows Mixed Reality and laid off nearly all teams behind virtual reality and HoloLens earlier last year.
The layoffs and restructuring within Microsoft’s mixed reality division indicate substantial changes in the company’s strategy in this area. The future trajectory of Microsoft’s investments in mixed reality remains to be seen.