Microsoft reduces headcounts in HoloLens, Surface, Xbox in the recent round of layoffs: the largest layoffs in 8 years

The layoffs have kept the tech industries well-rested. Microsoft is one of the companies that has initially announced playoffs. But, the chain of layoffs has not ended yet and may not see a halt shortly as the companies gear up for another round of massive restructuring process.

Previously, Microsoft announced implementing the layoffs of 10,000 workers. The tech giant has declared that it would continue restructuring different units, including its Surface devices, Hololens mixed reality hardware, and Xbox. The people familiar with the matter have brought the news into account.

The job cuts in the Hololemns division question if the company will produce a third iteration of goggles outside what was planned for the U.S. army. The reductions in the Xbox gaming unit were visualized in the marketing division and the Xbox gaming ecosystem group, as revealed by one of the executives.

Phil Spencer, Xbox Chief has talked with the employees about the layoffs and made them aware of the job cuts. However, he has not revealed yet which part of the business mainly was impacted. He has written in an email asking the employees to take the required time and space to process the changes and support their colleagues in difficult situations.

Microsoft has declined to comment on the layoffs but asserted that the company would remain committed to developing mixed reality space and the present Hololens 2 version. The company has shared it in an email, claiming that it is committed to developing the mixed reality project.

A notice filed by Seattle has shown that around 617 workers have been laid off in that area.
Microsoft has previously announced that it has planned to let go of 5 percent of the total headcount, or around 10,000 workers in the present quarter. The company has taken a 1.2 billion USD charge for the previous quarter, which consisted of 800 million USD for job cuts, and the rest is accounted for the changes made in the portfolio of hardware and the price of consolidating the leases of their real estate. The company has refrained from entering details of hardware changes or where the job cuts have been necessarily made.

Layoffs have even taken place in the video game sector that develops Microsoft halo games and other employees in the mixed reality groups, including the employees working for the version of HoloLens for the U.S. Army. The job reductions could be validated by the fact that Congress has previously rejected the Army’s request for purchasing 6900 hololens in the present fiscal year, accounting for a valuation of 400 million USD. the Hololen’s hardware’s future may be on the verge of falling if they do not receive massive orders from the U.S. army. It is backed up by the lack of significant customers in the division.

Microsoft’s growth has not been stagnant in the looming global economy, it is investing in segments that can turn out to be ‘lucrative’:

Recently, Microsoft has developed the power AI-chatbot-ChatGPT. It has invested a vast sum of 10 billion USD in the development of the chatbot. It implies that the sector has not been stagnating. Microsoft has identified that its search engine could be lucrative in yielding high profits. It has proposed the acquisition of the largest gaming industry named Activision Blizzard, which would create a new portfolio of high-profile gaming titles.
The advancements may come off as a relaxation despite the company’s massive layoffs.

Hundreds of tech firms have taken part in the laying off process. Disney and Yahoo have recently joined the bandwagon, and the list seems never-ending.

A tech industry analyst has stated that the layoffs in Microsoft and Amazon have been due to the additional challenges the companies are facing to progress with their businesses.
In terms of Twitter, the layoffs are mostly attributed to the lack of advertising revenue and driving its model away from advertising. For Meta, it has been due to the shift in the advancements of the metaverse.

The Russian-Ukrainian war, the ongoing recession, and the overhiring process in various tech industries during the COVID-19 pandemic are the main causes of such layoffs.

Numerous IT companies saw significant growth during COVID-19 and continued their hiring practices only to discover that things started to go south once the pandemic restrictions and lockdowns were lifted and things started to return to normal. In addition, the Russian invasion of Ukraine has disrupted the supply chain, raised interest rates, increased the cost of fuel, and increased inflation. All of these factors have negative effects on the economy and caused businesses to go through a process of layoffs.

Despite the ongoing job cuts, experts have mentioned that there has been a demand for job hunters in specific sectors, especially for engineers with expertise in AI and data science.

But, an employment lawyer in the law firm Freeths, has stated that the employees affected by the layoffs may not be able to land new jobs or secure alternatives as similar reductions are taking place in other tech industries.

edited and proofread by nikita sharma