Microsoft Cuts Jobs in Azure, HoloLens, and Other Units to Control Costs

Microsoft has announced a new round of layoffs, impacting approximately 1,000 employees across various departments, including its Azure cloud unit and HoloLens mixed-reality organization. This move is part of the company’s efforts to maintain its profit margins amid increased capital spending for cloud infrastructure and AI applications.

The layoffs are a response to the need to align Microsoft’s cost structure with its revenue and customer demand. Despite the company’s growth in recent years, it has been experiencing a shift in customer behavior, with many optimizing their digital spend to achieve more with less. This trend is particularly pronounced in regions where economic conditions are uncertain or in recession.

The affected departments include the Azure for Operators and Mission Engineering teams, which are part of the Strategic Missions and Technologies organization established in 2021. This organization focuses on ambitious projects such as quantum computing and space technologies. The mixed reality department, which contributes to the development of the HoloLens 2 augmented reality headset, is also impacted.

Microsoft has reaffirmed its commitment to the Department of Defense’s Integrated Visual Augmentation System (IVAS) program, which utilizes a modified version of the HoloLens. The company will continue to sell the HoloLens 2 and support existing customers and partners. Despite the layoffs, Microsoft remains committed to its strategic growth areas, including AI and cloud computing.