Microsoft Lays Off All Its VR, Mixed Reality, and HoloLens Employees

(Credit: Sven Hoppe/picture alliance via Getty Images)

(Credit: Sven Hoppe/picture alliance via Getty Images) Many large tech companies hired and expanded their offerings a little too fast during the start of the COVID-19 pandemic, and now their employees are paying the price. In the wake of a contracting economy, some of these corporate giants are laying off workers as quickly as they hired them—and Microsoft is no exception.

A new Securities and Exchange Commission (SEC) filing revealed last week that Microsoft intends to lay off 10,000 employees as it reconsiders its plans for the near future. “On Jan. 18, 2023, Microsoft Corporation announced to its employees a series of actions it is taking in response to macroeconomic conditions and changing customer priorities,” the filing reads. “These actions include workforce reductions of approximately 10,000 employees by the end of the third fiscal quarter of 2023, changes to our hardware portfolio, and lease consolidation to create higher density across our workspaces.”

These cutbacks have already begun. On Friday, AltspaceVR—a virtual reality company Microsoft acquired back in 2017—tweeted that it would shut down on March 10. Microsoft had dumped the entire team. Microsoft additionally laid off its “Mixed Reality Tool Kit” (MRTK) group, which was responsible for the company’s open-source mixed reality framework for Unity. MRTK was due for a new version release next month; instead, it’s being put to rest.

Microsoft’s soon-to-be-defunct HoloLens 2. (Credit: Microsoft)

Though MRTK was experimentally compatible with consumer-focused VR systems like Meta Quest, SteamVR, and others, it was integral to Microsoft’s own HoloLens project. But HoloLens has also suffered as of late: Despite a $22 billion deal with the US military, Microsoft lacks any faith in its augmented reality (AR) goggles, and this has apparently translated into a virtually unusable product. It’s no surprise, then, that Microsoft—supposedly beholden to thousands of layoffs if it wants to survive—would ditch the goggles given the first opportunity.

By choosing to chop its VR and MRTK teams, Microsoft has signaled an apparent lack of confidence in the so-called “metaverse.” This isn’t particularly surprising. One might say the metaverse is the cryptocurrency of the VR world: exciting and arguably useful for a few while useless and laughably unstable for the majority. Having realized that few consumers actually want to be involved in the metaverse, Meta—which underwent a name change solely due to its blind faith in the metaverse—laid off 11,000 of its employees in November.

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