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

A spokesperson for Microsoft confirmed to CNBC on Monday that the company will lay off some mixed reality employees. Although the cuts will affect the department that works on the HoloLens 2 augmented reality headset, Microsoft intends to continue selling the device.

The reduction comes a year after the software company announced changes to its hardware lineup as part of a round of layoffs affecting 10,000 employees, including some in mixed reality. In the months that followed, Microsoft discontinued several keyboard models, frustrating some loyal customers.

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

According to a source familiar with the situation, the company is laying off over 1,000 people in total, including those working in mixed reality.


Microsoft has had limited success with the HoloLens since its launch in 2015. However, the US Defense Department awarded the company a contract for a modified HoloLens known as the Integrated Visual Augmentation System (IVAS). According to Bloomberg, soldiers who used the devices reported nausea and other symptoms. Tests indicated that an updated model appeared promising.

Since then, Microsoft and its highly valued technology peers have invested billions in commercializing artificial intelligence. Microsoft is deploying Nvidia graphics processing units to support the Copilot chatbot and OpenAI’s popular ChatGPT. Premium AI capabilities in Microsoft 365 productivity applications allow you to write memos, draft presentations, and summarize meetings.

Microsoft reduced its investment in augmented reality and virtual reality, which block out the surrounding world, by deprecating Windows Mixed Reality, which included tools for running applications in head-mounted displays, in December.

The spokesperson stated that Microsoft will continue to sell the HoloLens 2 headset, which was released in 2019, but did not indicate when a new model would be available. An insider revealed in 2022 that the company had canceled a third version.

Apple launched the Vision Pro augmented reality headset in January.

Microsoft continues to support Mesh, a feature that allows headset users to participate in three-dimensional Teams video calls with their colleagues. At the Microsoft Ignite conference in Seattle in November, CEO Satya Nadella stated that the company is “reimagining the way employees come together and connect using any device, whether it’s their PC, HoloLens, or Meta.”
















































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