Microsoft CEO Satya Nadella speaks at a media conference at the company’s campus in Redmond, Washington, on May 20, 2024.
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Microsoft will lay off some employees working in mixed reality, a spokesperson told CNBC on Monday. Although the cut will affect the department that contributes to the HoloLens 2 reality headset, Microsoft plans to continue selling the device.
The cuts come a year after the software maker said it would make changes to its hardware lineup as part of layoffs that affected 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 Microsoft’s Mixed Reality organization,” a spokesperson said in an email. “We remain committed to the Department of Defense’s IVAS program and will continue to deliver advanced 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.
Microsoft has not found great success with HoloLens since its introduction in 2015. But the US Department of Defense awarded the company a contract for a modified HoloLens called the Integrated Visual Augmentation System. Soldiers who used the device, however, reported experiencing nausea and other conditions, Bloomberg reported. Tests suggest that the updated model looks promising.
Since then, Microsoft and its most valued tech peers have poured billions into commercializing artificial intelligence. Microsoft has raced to distribute it Nvidia graphics processing unit so that people can use chatbot Copilot and the popular OpenAI ChatGPT supported by Microsoft. Premium AI features in Microsoft 365 productivity apps can write memos, draft presentations and summarize meetings.
In December, Microsoft further reduced its investment in augmented reality and virtual reality, which blocks the world around it, while eliminating Windows Mixed Reality, which includes tools to run applications on a head-mounted display.
The spokesperson said that Microsoft will continue to sell the HoloLens 2 headset released in 2019 but did not indicate whether a new model is coming. Insider reported in 2022 that the company canceled the third version.
Apple brought its own augmented reality headset, the Vision Pro, in January.
Microsoft continues to support a feature called Mesh that allows people in headsets to participate in three-dimensional Teams video calls with colleagues. At Microsoft’s Ignite conference in Seattle in November, CEO Satya Nadella said the company is “reimagining the way employees come together and connect using any device, whether it’s a PC, HoloLens, or Meta Quest.”
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