Microsoft is reportedly reducing the size of its HoloLens group.
The company announced yesterday it is laying off 10000 employees (around 5% of its total workforce) citing macroeconomic conditions.
Microsoft is far from the only big tech company to make this move – this week Amazon started laying off 18000 people, Meta laid off more than 11000 in November, and Snap laid off 20% of its staff in September. Google and Apple have instituted hiring freezes for some teams.
CEO Satya Nadella’s memo to employees mentioned “changes to our hardware portfolio”, without giving specifics. But Bloomberg’s Dina Bass reports the layoffs include the Mixed Reality group, responsible for HoloLens 2 and the IVAS militarized version.
Last year Business Insider reported a device that would have been named HoloLens 3 was canceled in 2021 following “confusion and strategic uncertainty” and the formation of a partnership with Samsung. But that partnership apparently was a “shit show”, and Samsung is reportedly now going ahead with its own headset separate from Microsoft. In June Microsoft’s long time mixed reality figurehead Alex Kipman left the company, with Scott Evans taking over. Evans hinted at an eventual HoloLens 3 in December, but given the layoffs the status of that project is unclear.
Microsoft was pushing ahead with IVAS – a heavily modified variant of HoloLens 2 for the US Army. The contract is theoretically worth up to $21.88 billion over 5-10 years with a maximum eventual order of 120,000 units. However, it has been plagued with poor performance reviews as the device struggles to handle the varied harsh real-world conditions needed for military use and soldiers complain of discomfort issues. Earlier this month the US Congress rejected further orders, with only 5000 units secured so far.
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