On Monday, Microsoft announced layoffs reportedly affecting around 1,000 employees. As reported previously by CNBC, the mixed reality department working on HoloLens 2 is one of the areas affected. Separately, Business Insider reported that Azure for Operators and Mission Engineering has also seen cuts of “hundreds” of employees.

Microsoft spokesperson Craig Cincotta said in a statement emailed to The Verge, “Earlier today, we announced a restructuring of Microsoft’s Mixed Reality organization. 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.”

This round of layoffs comes more than a year after Microsoft laid off more than 10,000 people, and CEO Satya Nadella said the company was changing its hardware portfolio. Since then, Microsoft has closed its acquisition of Activision-Blizzard, invested heavily in AI, and recently begun a push for “AI PCs” with a new round of Surface devices powered by Qualcomm chips.

“Organizational and workforce adjustments are a necessary and regular part of managing our business. We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners,” said Cincotta.

Microsoft formed the Azure for Operators and Mission Engineering department in 2021 to encompass “moonshots,” like the Azure Space unit seeking to work with companies like SpaceX and roll out a portable data center in a box. Other teams in the group work on projects like support for telecoms and work on quantum computing.