Microsoft has laid off entire teams behind Virtual, Mixed Reality, and HoloLens

Hololens 2015
(Image credit: Microsoft)

What you need to know

  • In the latest update in the massive Microsoft layoffs, we now have a better idea of how deep the cuts run in Microsoft's Mixed Reality team. 
  • The team behind AltSpaceVR and also the Mixed Reality Tool Kit have been laid off in their entireties. 
  • Potentially, these layoffs throw serious doubt on the future of HoloLens, which is currently struggling to retain its military contract with the U.S. government. 

The scale of the Microsoft layoffs keeps revealing itself through social media posts, as we get to grips with just how deep and broad Microsoft is looking to restructure. 

This past week, Microsoft revealed its joining Amazon, Google, and others in laying off thousands of employees. The cuts reduces Microsoft's global workforce by 5%, which grew rapidly to take advantage of opportunities that were presented during the pandemic. With work-from-home culture ending, inflation spiraling, and Putin's war of aggression in Ukraine disrupting energy markets, Big Tech is scaling back to keep shareholders happy in a tough economic environment. 

Microsoft is rearranging its bets for the future of the company as a result. Despite having acquired AltSpaceVR back in 2017, Microsoft culled the entire team behind the virtual reality workspace project this past week. As a result, AltSpaceVR will shutter for good in March, effectively ending Microsoft's "metaverse" efforts with it. Supposedly, Microsoft Mesh will be AltSpaceVR's successor, but it remains to be seen just how serious the company is about the so-called "metaverse," despite CEO Satya Nadella's buzzword-laden speeches on the topic at recent events. 

In addition to the death of AltSpaceVR, Microsoft has also culled the entire team behind the popular MRTK framework. MRTK is Microsoft's "Mixed Reality Tool Kit," which is a cross-platform framework for spatial anchors in virtual reality spaces. MRTK was built for Unity VR integrations, and works with Meta's headsets with a focus on HoloLens

HoloLens has been scaled back already in recent years following the departure of its chief architect Alex Kipman. Microsoft has been pursuing a HoloLens contract with the U.S. military, which was recently scaled back by the U.S. Congress, owing to reported problems with the program. 

For Microsoft to cull the entire team behind MRTK, which was due to release a new version just next month, it paints a picture of a company that perhaps no longer believes in virtual reality. There are many who believe the "metaverse" represents the next big opportunity in human-computer interfacing, but even Facebook, who rebranded its entire company to Meta in the belief of this technology, is scaling back in this area as well — laying off 11,000 staff back in November. 

Jez Corden
Co-Managing Editor

Jez Corden is a Managing Editor at Windows Central, focusing primarily on all things Xbox and gaming. Jez is known for breaking exclusive news and analysis as relates to the Microsoft ecosystem while being powered by tea. Follow on Twitter @JezCorden and listen to his XB2 Podcast, all about, you guessed it, Xbox!