In a latest attempt to reorganize, American tech giant Microsoft has reportedly made a large round of job cuts, which has hit its Azure cloud segment as well as the mixed reality team. The restructuring has likely affected hundreds of employees.
The Azure for Operators segment witnessed substantial cuts, with a report by Business Insider suggesting as many as 1,500 job reductions. This restructuring aligns with Microsoft’s strategic realignment efforts, particularly within its Strategic Missions and Technologies (SMT) organization, spearheaded by Jason Zander, the former executive vice president of Microsoft Azure. The Azure for Operators and Mission Engineering houses projects like quantum computing and space exploration, but Microsoft is prioritizing artificial intelligence as a future growth area.
Similarly, Microsoft’s mixed reality team, which is working on the HoloLens 2 augmented reality headset, is also reportedly going through job cuts affecting over 1,000 employees. While confirming the layoffs, a Microsoft spokesperson told CNBC that the company is still committed to its mixed reality products and sales of HoloLens 2.
The spokesperson also said that customers, partners, and employees should “expect business to continue as usual across our business, including the HoloLens 2 and the Department of Defense Integrated Visual Augmentation System (IVAS) program.” IVAS is a military version of the HoloLens, which uses augmented reality to display information to soldiers in a wearable headset. Mixed Reality is one of Microsoft’s eight engineering divisions and employs thousands of people.
Microsoft said that it “reorganizes occasionally to reflect changes in business priorities and to optimize productivity and efficiency”. Therefore, the company “routinely” evaluates its workforce and organizational structure to align resources with business goals.
This workforce reduction reflects Microsoft’s strategic shift towards AI and away from certain hardware ventures. The company is investing heavily in AI integration across its products and services, including its recent push for “AI PCs.”
The news also follows a larger layoff trend, especially in the tech sector, that’s spilling from 2023 into 2024. Giants like Amazon, Meta, Discord, etc. have announced workforce reductions, citing economic slowdowns and the need to adapt to changing market conditions. In April, tech major Google announced to again trim its workforce across several departments.
