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Microsoft’s Dismissals Show Clear Departure from XR Goals

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Devastatingly, the teams responsible for developments such as HoloLens, AltSpaceVR, and MRTK have been laid off.

Microsoft’s announcement of 10,000 job cuts shocked many, representing nearly 5% of the company’s workforce. While current and former employees have been vocal about their frustrations on social media platforms, there has been a particular interest in understanding why certain business areas have seen significant job losses.

Microsoft CEO Satya Nadella has long espoused the importance of the ‘metaverse’ and how it will shape consumer and work lives in the future. One such area is the virtual, augmented, mixed, and extended reality (XR) space. Despite this, it appears that Microsoft’s XR ambitions may be faltering, with reports of teams involved in projects like HoloLens, AltSpaceVR, and MRTK (Mixed Reality Tool Kit) being dissolved entirely.

HoloLens has been subject to various refocusing efforts since its inception, as well as the controversy surrounding its chief architect Alex Kipman stepping down from his role just a few months ago. There have also been reports that suggest HoloLens failed US military trials which could mean limited resources available to further develop the project. Additionally, Microsoft decided to end its support for MRTK even though version 3 was due to launch in February 2023. This open-source project was designed to help developers by providing support for platforms such as Microsoft HoloLens 2 and Meta Quest. Although MRTK is still open-source, community groups may be able to continue development without official support from Microsoft.

Microsoft’s 2017 acquisition of AltSpaceVR, with plans to create ‘Microsoft Mesh’ as a successor, is yet another loss in the job cut casualties. Unfortunately, there are still queries concerning how extensive these plans will be, considering that entire teams behind other projects have been laid off or disbanded altogether. Despite this hurdle, Microsoft remains dedicated to its XR goals and future visions. 

It is difficult to gauge whether this move signals another Windows Phone moment for Microsoft, where they are forced into strategic withdrawals due to failing competition, or if their XR strategy simply needs clarification and more resources invested into it at a later stage. The BUILD developer conference in May might provide us with more insights regarding the changes made by Microsoft’s latest round of layoffs and a clearer picture of what the new XR strategy may entail.

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