Microsoft is reportedly laying off hundreds of employees in Azure and its mixed reality businesses.

Business Insider reported Monday that Microsoft will cut as many as 1,500 in Azure for Operators and Mission Engineering. This is part of Microsoft’s Strategic Missions and Technologies (SMT) organisation led by Jason Zander, the former executive vice president of Microsoft Azure.

SMT is known for quantum computing, space and other bleeding-edge technology projects. Microsoft had 221,000 employees worldwide as of June 30, according to the vendor.

Microsoft layoffs

CRN US has reached out to Microsoft for comment. The tech giant is a member of CRN US’s 2024 Channel Chiefs. The vendor has about 400,000 partners worldwide.

Business Insider said in a separate article Monday that Zander credited the layoffs to Microsoft putting more investment into artificial intelligence, halting previews for Azure Operator 5G Core (AO5GC) and Azure Operator Call Protection.

Employees working on The Azure Operator Nexus will join the Cloud + AI organisations’ Azure Edge and Platform product line, according to Business Insider.

CNBC reported Monday that Microsoft will lay off employees in its HoloLens 2 and mixed reality department. The vendor is still selling the device and still committed to the U.S. Department of Defense’s Integrated Visual Augmentation System (IVAS) program and Windows 365 mixed reality hardware.

A variety of technology vendors have conducted layoffs this year as companies look to AI as a potential future revenue driver while also contending with high inflation in the United States.

Vendors to conduct layoffs recently include Intel, Amazon Web Services and ConnectWise.