Microsoft Is Shutting Down Its Metaverse Unit Amidst Broader Layoffs

Microsoft metaverse
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Microsoft metaverse
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Photo Credit: Turag Photography

Microsoft is shutting down its metaverse unit comprising 100 employees amidst broader layoffs.

Microsoft has internally announced disbanding its Industrial Metaverse Core group, a division comprising around 100 employees focused on bringing the metaverse to industrial environments through software. 

The company formed the group only four months ago as a bridge to implement metaverse interfaces to “control electrical power plants, industrial robotics, and transportation networks.”

While the 100 employees that comprised the group were laid off, Microsoft says the products they built will continue to receive support.

“We are applying our focus to the areas of the industrial metaverse that matter most to our customers, and they will see no change in how they are supported. We look forward to sharing additional information in the future.”

In January, Microsoft announced a round of approximately 10,000 layoffs as part of a broader restructuring process. Reports indicate that Microsoft’s cuts have already affected other metaverse projects, particularly those under its mixed reality division. That includes the development of Azure AI, Mesh immersive solutions, the mixed reality tool kit (MRTK) — the software development kit for Microsoft’s Hololens VR device — the Hololens itself, and AltspaceVR.

AltspaceVR announced in January its March 10 closure. It initially launched in May 2015 with the platform’s founder and then-CEO, Eric Romo, who went to work as Meta’s Director of Product, Reality Labs Social Experiences, until 2022. Following a near-closure in 2017, Microsoft acquired the Altspace service — when the company and the tech sector were focused heavily on VR initiatives.

Microsoft is taking part of its resources previously allocated to metaverse initiatives to put behind AI-based initiatives, which it has focused on since at least January. Microsoft disclosed on January 23 a “multi-year, multibillion-dollar investment” in OpenAI, the company behind the development of GPT-3 and GPT-4 and the ChatGPT interface. This investment led to the recent announcement of the inclusion of ChatGPT in Microsoft’s search engine Bing and its web browser Edge.

“AI will fundamentally change every software category, starting with the largest category of all — search,” says Microsoft CEO Satya Nadella.