Microsoft confirms layoffs in mixed reality but will keep selling HoloLens 2 headsets

Microsoft
will
lay
off
some
employees
who
work
on
mixed
reality,
a
spokesperson
told
CNBC
on
Monday.
Although
the
cuts
will
affect
the
department
that
contributes
to
the
HoloLens
2
augmented
reality
headset,
Microsoft
plans
to
continue
selling
the
device.

The
reduction
comes
a
year
after
the
software
maker
said
it
would
make
changes
to
its
hardware
lineup
as
part
of
a
round
of
layoffs
that
hit
10,000
employees,
including
some
in
mixed
reality.
In
the
following
months,
Microsoft
discontinued
several
keyboard
models,

causing
frustration
for
some
dedicated
customers.

“Earlier
today
we
announced
a
restructuring
of
the
Microsoft’s
Mixed
Reality
organization,”
the
spokesperson
said
in
an
email.
“We
remain
fully
committed
to
the
Department
of
Defense’s
IVAS
program
and
will
continue
to
deliver
cutting
edge
technology
to
support
our
soldiers.
In
addition,
we
will
continue
to
invest
in
W365
to
reach
the
broader
Mixed
Reality
hardware
ecosystem.
We
will
continue
to
sell
HoloLens
2
while
supporting
existing
HoloLens
2
customers
and
partners.”

Altogether,
the
company
is
letting
go
of
over
1,000
people,
including
in
mixed
reality,
a
person
familiar
with
the
matter
said.

Microsoft
has
not
found
great
success
with
the
HoloLens
since
its
introduction
in
2015.
But
the
U.S.
Defense
Department
gave

a
contract
to
the
company
for
a
modified
HoloLens
named
the
Integrated
Visual
Augmentation
System.
Soldiers
who
used
the
devices,
however,
reported
dealing
with
nausea
and
other
conditions,

Bloomberg
reported.
Tests
suggested
that
an
updated
model
looked
promising.

Since
then,
Microsoft
and
its
highly
valued
technology
peers
have
poured
billions
into
commercializing
artificial
intelligence.
Microsoft
has
raced
to
deploy


Nvidia
graphics
processing
units
so
people
can
use
a
Copilot
chatbot
and
Microsoft-backed
OpenAI’s
popular
ChatGPT.
Premium
AI
features
in
Microsoft
365
productivity
applications
can
write
memos,
draft
presentations
and
summarize
meetings.

In
December,
Microsoft
further
reduced
investment
in
augmented
reality
and
virtual
reality,
which
blocks
out
the
surrounding
world,
when
it

deprecated
Windows
Mixed
Reality,
which
included
tools
for
running
applications
in
head-mounted
displays.

The
spokesperson
said
Microsoft
will
keep
selling
the
HoloLens
2
headset
that
was
released
in
2019
but
did
not
indicate
that
a
new
model
would
be
coming.

Insider
reported
in
2022
that
the
company
had
canceled
a
third
version.

Apple
brought
out
its
own
augmented
reality
headset,
the

Vision
Pro,
in
January.

Microsoft
continues
to
support
a
feature
called
Mesh
that
lets
people
in
headsets
participate
in
three-dimensional
Teams
video
calls
with
colleagues.
At
the
Microsoft
Ignite
conference
in
Seattle
in
November,
CEO
Satya
Nadella
said
the
company
was
“reimagining
the
way
employees
come
together
and
connect
using
any
device,
whether
it’s
their
PC, HoloLens,
or


Meta
Quest.”

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