Microsoft lays off staff related to VR projects and shuts down AltspaceVR

While tech giants like Apple and Meta are attempting to expand in the metaverse, Microsoft is laying off its mixed reality staff and closing down AltspaceVR. 

SEC filings indicate that the American tech corporation is shifting its business focus and will fire over 10,000 employees, which amount to around 5% of its global workforce. The layoffs could indefinitely pause Microsoft’s Hololens and headset-related projects.

Last Friday, AltspaceVR, a VR company acquired by Microsoft in 2017, announced it would be shutting down on March 10. The Altspace team wrote that the company pivots its business “to support immersive experiences powered by Microsoft Mesh.”

Microsoft also laid off the entire team responsible for its “Mixed Reality Tool Kit” (MRTK) group, an open-source mixed reality framework for Unity. The release of a new version of MRTK was planned for next month, but it has been canceled.

Microsoft’s decision to disband its VR and MRTK teams suggests that the company might not have a strong belief in the potential of the metaverse. However, the company is putting effort into Mesh, the apparently most important VR project for Microsoft.

Last October, the tech company introduced custom avatars and AI features to the video conference app “Teams.” The announcement is a part of the Microsoft Mesh initiative, a mixed-reality platform that allows users to interact with each other and their surroundings in a shared virtual environment.

Microsoft has also recently extended its partnership with OpenAI, the creator of ChatGPT.