Microsoft has announced layoffs within its mixed reality division, encompassing virtual and augmented reality technologies.
Despite these cuts, the company will continue to sell its HoloLens 2 headsets, introduced in 2019.
The layoffs are part of an ongoing restructuring process that began last year when Microsoft announced changes affecting 10,000 employees, including those in the mixed reality sector.
This restructuring also saw the discontinuation of several keyboard models, disappointing some loyal customers.
A Microsoft spokesperson confirmed the layoffs, emphasizing the company’s commitment to the U.S. Department of Defense’s Integrated Visual Augmentation System (IVAS) program.
This program involves a modified version of the HoloLens for military use, despite reports of soldiers experiencing nausea and other issues with the device. Recent tests of an updated model have shown promise.
The spokesperson also highlighted Microsoft’s continued investment in the broader mixed reality hardware ecosystem, including the HoloLens 2, and support for existing customers and partners.
However, there was no mention of a new model following reports that a third version had been cancelled.
Microsoft has shifted significant resources towards artificial intelligence, integrating AI capabilities into its products like Microsoft 365.
This includes premium features that leverage AI for tasks such as writing memos and drafting presentations. The company has also invested heavily in AI infrastructure, deploying Nvidia GPUs to enhance AI functionalities like the Copilot chatbot and OpenAI’s ChatGPT.
In December, Microsoft reduced its investment in augmented and virtual reality further by deprecating Windows Mixed Reality, which supported applications in head-mounted displays.
Despite these changes, Microsoft remains committed to its Mesh feature, enabling three-dimensional Teams video calls via headsets. CEO Satya Nadella reiterated at the Microsoft Ignite conference in November the company’s vision of transforming employee connectivity using various devices, including PCs, HoloLens, and Meta Quest.
The announcement comes as competitors like Apple introduce new augmented reality headsets, indicating a competitive and rapidly evolving market.
