Microsoft Corp. has reportedly cut jobs at the business units responsible for developing its Surface device lineup, Xbox video game console and metaverse products.

Bloomberg reported the development today, citing sources familiar with the matter. The layoffs are said to have been made on Thursday.

Like other major tech companies, Microsoft is reducing its headcount in a bid to lower operating costs. The company last month announced a restructuring initiative that will see it let go 10,000 employees, or about 5% of its workforce. The layoffs reported today were made as part of the initiative.

The layoffs saw Microsoft disband its recently formed Industrial Metaverse Core group, according to The Information. About 100 employees are leaving the company in connection with the move.

The Industrial Metaverse Core group reportedly focused on developing ways to apply metaverse technologies in industrial environments such as factories. The metaverse is a proposed future version of the internet that would include more virtual reality and augmented reality elements, as well as other emerging technologies. Microsoft competes in the AR market with its HoloLens 2 headset.

As part of its work, the disbanded Industrial Metaverse Core group reportedly sought to develop “immersive new software interfaces” for operating industrial control systems. In particular, the focus was on industrial control systems used to manage electrical power plants, factory robots and transportation networks. 

Additionally, the group reportedly planned to sell technology that Microsoft had obtained through its acquisition of startup Bonsai AI Inc. in 2018. Bonsai AI created a software platform for building artificial intelligence models. Using the platform, the startup built an AI model for calibrating computer numerical control systems, a type of machine used to automate manufacturing tasks. 

Microsoft’s layoffs reportedly also affected other parts of its metaverse business. According to Bloomberg, the company has let go most of the employees at the team responsible for HoloLens hardware development. It’s unclear how the move might affect Microsoft’s plans to release new versions of the headset in the future. 

“Microsoft remains committed to the industrial metaverse,” the company said in a statement. “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.”

The layoffs are also said to affect Microsoft’s Surface unit, as well as the division that oversees its Xbox video game console. Most of the layoffs at the latter division reportedly affect its marketing department and a team known as the Gaming Ecosystem Group.

Photo: Microsoft