Microsoft appears to have lost all confidence in virtual and mixed reality (MR), eliminating entire teams behind its development efforts.

Microsoft announced widespread layoffs last week, impacting some 10,000 employees, or roughly 5% of its workforce. In the days since the announcement, more information has come to light about which departments have been the hardest hit, and it appears VR and MR are among them.

According to Windows Central, the Redmond company eliminated the entire development team behind its AltSpaceVR project, with the virtual reality workspace slated to shutdown in March.

The company’s Mixed Reality Tool Kit (MRTK) development team was also eliminated in its entirety. The toolkit was designed for Unity VR and worked with Meta’s headsets. MRTK was an important part of Microsoft’s HoloLens project, which itself is already in trouble after Congress refused to fund the US Army’s request to purchase more of the augmented reality (AR) goggles.

As Windows Central points out, taken together, the scope of the layoffs seem to indicate Microsoft has lost faith in VR and the metaverse. If that is the case, it would deal a major blow to Meta’s efforts to make the metaverse a reality.