Microsoft Pulls the Plug on Industrial Metaverse Team – Here's What Happened

Microsoft has discontinued its Industrial Metaverse Core team, a four-month-old project aimed to encourage the use of the metaverse in industrial environments.

According to a Thursday report by The Information, the tech giant has also laid off employees working on the project, which amounts to about 100 people. The company wants to prioritize shorter-term projects over those needing longer to generate meaningful revenue, the report said, citing a person familiar with the matter. 

The Industrial Metaverse team, internally referred to as "Project Bonsai," focused on how to use artificial intelligence and digital technologies to enable people to interact with and optimize physical goods, assets, places, processes, and equipment. 

Launched in October, the team worked with clients in health care, retail financial services, and energy, among other industries, in building the components that industrial customers can use. 

It is worth noting that Microsoft already had some major customers in the Industrial Metaverse space, including Mercedes Benz and Coca-Cola. A spokesperson for the company has reportedly said:

"Microsoft remains committed to the industrial metaverse. We are applying our focus to the areas of the industrial metaverse that matter most to our customers and they will see no change in how they are supported. We look forward to sharing additional information in the future."

The layoffs are part of a plan to cut off 10,00 workers announced by CEO Satya Nadella earlier this month. The move comes as Microsoft faces macroeconomic uncertainty and slowing growth amid a global stock market rout and heightened fears over a hard economic landing. 

The metaverse is a shared, immersive, online 3D space where users can interact with each other and with computer-generated objects and avatars. Major tech companies such as Microsoft and Meta Platforms (META) have already shown interest in developing the metaverse. 

Last week, Robin Seiler, who oversees Microsoft's mixed-reality operations, gave assurances that it was committed to continuing some of its mixed-reality products, including Microsoft Mesh and the HoloLens 2 headset. 

However, the assurances came shortly after Microsoft had ended its AltspaceVR meeting solution for avatars, along with eliminating its entire team that was building its Mixed Reality Toolkit, which is now a separate open source project.

While it is still early for the metaverse to become a reality, the concept has already found a great amount of traction across some jurisdictions. According to a recent survey, Florida residents show the highest interest in exploring the metaverse, with 670 searches per 1,000 people. 

Notably, Orlando and Miami have used 3D and virtual reality (VR) technologies to recreate their cities in the metaverse.