Microsoft confirms layoffs in mixed reality but will keep selling HoloLens 2 headsets
Microsoft CEO Satya Nadella speaks at a media briefing at the company’s campus in Redmond, Washington, on May 20, 2024.
Chona Kasinger | Bloomberg | Getty Images
Microsoft will lay off some employees who work on mixed reality, a spokesperson told CNBC on Monday. Although the cuts will affect the department that contributes to the HoloLens 2 augmented reality headset, Microsoft plans to continue selling the device.
The reduction comes a year after the software maker said it would make changes to its hardware lineup as part of a round of layoffs that hit 10,000 employees, including some in mixed reality. In the following months, Microsoft discontinued several keyboard models, causing frustration for some dedicated customers.
“Earlier today we announced a restructuring of the Microsoft’s Mixed Reality organization,” the spokesperson said in an email. “We remain fully committed to the Department of Defense’s IVAS program and will continue to deliver cutting edge technology to support our soldiers. In addition, we will continue to invest in W365 to reach the broader Mixed Reality hardware ecosystem. We will continue to sell HoloLens 2 while supporting existing HoloLens 2 customers and partners.”
Microsoft has not found great success with the HoloLens since its introduction in 2015. But the U.S. Defense Department gave a contract to the company for a modified HoloLens named the Integrated Visual Augmentation System. Soldiers who used the devices, however, reported dealing with nausea and other conditions, Bloomberg reported. Tests suggested that an updated model looked promising.
Since then, Microsoft and its highly valued technology peers have poured billions into commercializing artificial intelligence. Microsoft has raced to deploy Nvidia graphics processing units so people can use a Copilot chatbot and Microsoft-backed OpenAI’s popular ChatGPT. Premium AI features in Microsoft 365 productivity applications can write memos, draft presentations and summarize meetings.
In December, Microsoft further reduced investment in augmented reality and virtual reality, which blocks out the surrounding world, when it deprecated Windows Mixed Reality, which included tools for running applications in head-mounted displays.
The spokesperson said Microsoft will keep selling the HoloLens 2 headset that was released in 2019 but did not indicate that a new model would be coming. Insider reported in 2022 that the company had canceled a third version.
Apple brought out its own augmented reality headset, the Vision Pro, in January.
Microsoft continues to support a feature called Mesh that lets people in headsets participate in three-dimensional Teams video calls with colleagues. At the Microsoft Ignite conference in Seattle in November, CEO Satya Nadella said the company was “reimagining the way employees come together and connect using any device, whether it’s their PC, HoloLens, or Meta Quest.”
WATCH: The headset wars: How Apple Vision Pro stacks up against competition
Chesnot | Getty Images
Dogecoin shot higher on Tuesday night, extending its postelection surge after President-elect Donald Trump formally announced the creation of the Department of Government Efficiency, which he referred to as “DOGE” in his statement.
Tesla CEO Elon Musk and Vivek Ramaswamy, former Republican presidential candidate and Strive Asset Management co-founder, will lead the department, Trump said in a statement. Together, they “will pave the way for my Administration to dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.”
Dogecoin was last up nearly 20%. It has been one of the biggest winners in the postelection rally, gaining 153% since election day compared to bitcoin’s 30% rise in the same period. It also shot past XRP this week to become the sixth largest cryptocurrency by market cap.
Dogecoin jumped after President-elect Donald Trump announced the creation of the Department of Government Efficiency, or “DOGE.”
Memecoins are seen as a gauge of retail interest and risk appetite in crypto. When memecoin activity ramps up, it usually indicates that retail investors are participating and have an appetite to speculate further out on the risk curve.
Trump initially floated the idea of an efficiency commission in September. Since then, Musk — who has called himself the “Dogefather” in the past and has been known to make public comments about the memecoin that influence its price — has posted on his social media platform X, referring to the commission as the “Department of Government Efficiency” or “D.O.G.E.”
Dogecoin gained relevance in 2021 following Musk’s endorsement and continuous hype on social media, which has since become a big catalyst for the coin. In May that year, Musk’s posts fueled dogecoin’s rally to its all-time high of 67 cents, per Coin Metrics. Though his appearance at the time on SNL, in which he called dogecoin “a hustle,” sent its price crashing down.
The rest of the crypto market was on pause from its postelection rally. Bitcoin was trading flat at about $87,000, after briefly touching $90,000 in late afternoon trading. Crypto stocks Coinbase and MicroStrategy were lower by 1% and 2%, respectively, in extended trading.
Elon Musk embraces Donald Trump during a campaign rally in Butler, Pennsylvania on Oct. 5, 2024.
Anna Moneymaker | Getty Images
President-elect Donald Trump said Tuesday that Elon Musk and former Republican presidential hopeful Vivek Ramaswamy will lead an efficiency group when his second term begins in January.
Trump wrote in a post that the Department of Government Efficiency, or DOGE, will “become, potentially, ‘The Manhattan Project’ of our time.” He also said the group would, “pave the way” for his next administration to “dismantle Government Bureaucracy, slash excess regulations, cut wasteful expenditures, and restructure Federal Agencies.”
Trump didn’t specify where cuts will take place or when the department may be formed. Congress hasn’t created or funded such an office. He said the group’s “work will conclude no later than July 4, 2026.”
Musk’s involvement in the envisioned group was previously promised by Trump and touted by the Tesla CEO, who spent an estimated $200 million backing the Republican nominee’s 2024 campaign, as a reason to put the former president back in the White House. Musk, who also runs defense contractor SpaceX, has reportedly been stationed at Trump’s Mar-a-Lago resort in Florida since Election Night.
Ramaswamy, who challenged Trump in the Republican primary, is co-founder of investment firm Strive Asset Management. He has opposed the widespread adoption of environmental, social and governance, or ESG, principles by companies.
Trump announced a number of other appointments Tuesday, including naming Fox News host Pete Hegseth as his pick for defense secretary and John Ratcliffe as CIA director.
The Spotify logo is displayed on a screen on the floor of the New York Stock Exchange on Dec. 4, 2023.
Brendan Mcdermid | Reuters
Spotify shares rose in extended trading Tuesday after the Swedish music streaming company issued a profit forecast for the fourth quarter that topped estimates.
Here’s how the company did, compared with what analysts expected:
- Earnings per share: 1.45 euros vs. 1.72 euros expected by LSEG
- Revenue: 3.99 billion euros vs. 4.02 billion euros expected by LSEG
- Monthly active users (MAUs): 640 million vs. 639 million expected by StreetAccount
While the company’s earnings and revenue for the third quarter trailed estimates, investors focused instead on guidance for the current period.
Spotify said operating income in the fourth quarter will come in at 481 million euros, exceeding the average analyst estimate of 432.7 million euros, according to StreetAccount. MAUs will increase to 665 million, while analysts were expecting 659.3 million, based on a StreetAccount estimate.
Still, revenue guidance trailed estimates. The company said sales will reach 4.1 billion euros, below the average analyst estimate of 4.26 billion euros, according to LSEG.
Subscribers to Spotify Premium, the company’s ad-free membership service that allows users to select songs on an unlimited basis, increased 12% year over year to 252 million, slightly ahead of estimates.
Spotify shares rose about 8% after the report to $452.35 after rising 2.2% in regular trading. The stock has more than doubled in value this year.
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