AltspaceVR, a virtual reality social platform acquired by Microsoft Corp. in 2017, is shutting down as part broad restructuring that saw Microsoft announce last week that it’s laying off 10,000 employees.

Founded in 2013, AltspaceVR brings two-dimensional web content into shared virtual spaces, similar to a collaborative workspace. The service allows users to watch streaming videos, play games and work together entirely within a virtual reality environment.

In a blog post Friday, AltspaceVR said it will close down on March 10, describing the decision as having “not been an easy one.”

“This is a platform many have come to love, providing a place for people to explore their identities, express themselves, and find community,” the AltspaceVR team wrote. “It has been a privilege to help unlock passions among users, from educational opportunities for personal growth to the development of unique and wonderful events, groundbreaking art and immersive experiences.”

Although AltspaceVR may be the most high-profile mixed reality-related cut by Microsoft as part of its restructuring, it was not alone. Windows Central reported this weekend that Microsoft has also laid off the entire team behind MRTK, the company’s Mixed Reality Took Kit.

That toolkit is aimed at accelerating cross-platform mixed-reality app development. The open-source MRTK supported multiple frameworks, including Microsoft HoloLens 2, Meta Quest, SteamVR and Lenovo ThinkReality A3 (Qualcomm Snapdragon Spaces).

It has also been reported that Microsoft has made significant cuts to its HoloLens unit following a setback in its attempts to sell the devices to the U.S. Army.

It was reported on Jan. 12 that a request from the U.S. Army for $400 million to buy 6,900 goggles based on the HoloLens had been blocked by Congress due to concerns over the technology. Instead, Congress approved $40 million in funding to fix the issues before it would consider approving a bulk buy.

With a much-reduced workforce dedicated to mixed reality, Microsoft is now focusing its efforts on Microsoft Mesh, a service announced in 2021 that is designed to enable more immersive mixed-reality apps.

“We look forward to what is to come, including our launch of Microsoft Mesh, a new platform for connection and collaboration, starting by enabling workplaces around the world,” the AltspaceVR team said. “In the near term, we are focusing our VR efforts on workplace experiences, learning from and alongside our early customers and partners and ensuring we deliver a foundation that enables security, trust and compliance.”

Image: AltspaceVR