Microsoft has laid off some employees in the divisions working on HoloLens mixed reality glasses, Xbox gaming console and Surface laptops and hybrid devices. Information about this came to Bloomberg thanks to unnamed sources. The cuts come as part of the overall job cuts at Microsoft that the company announced in January 2023.
Microsoft had a contract to supply a special version of augmented reality glasses for the U.S. Army. But the corporation lost that order: last month, the U.S. Congress rejected a request for funding in the amount of $ 400 million to purchase 6.9 thousand devices. In the fall of 2022, there were several publications about the failed test trials of the glasses with the conclusions that appeared in the report "This device would kill us".
The cuts, launched by the corporation last month, immediately affected the team developing HoloLens for the Pentagon. According to a Bloomberg informant, the future of the HoloLens hardware business looks unpromising without a large order from the military: there are too few potential customers to continue the work.
Microsoft declined to comment on these cuts, stating that the corporation remains "committed to mixed reality and HoloLens 2".
According to insiders, cuts in the Xbox gaming division have affected the marketing groups and the Xbox Gaming Ecosystem. Xbox head Phil Spencer informed his subordinates of the cuts via email, but did not disclose which parts of the division would be affected. "I encourage everyone to take the time to process these changes and support your colleagues," Spencer wrote in his email.
Microsoft announced the job cuts in January, with the corporation planning to lay off 10,000 people, or 5 percent of all employees, during the quarter. And as Bloomberg specifies, the direct and indirect costs of these processes will total $1.2 billion: $800 million is related to job cuts and the rest of the money is related to changes in the equipment portfolio and real estate costs. The layoffs, announced yesterday, affected 617 people working in Seattle.
