I’ve heard something similar from a contact who works in those departments. The VR space was hit hard, but the AR groups are still around.

Yes and even before this announcement, the story was about a shift from AltSpace towards the new Mesh for Teams product as in better world/room building will be part of Mesh. Mesh is being used internally and the project as far as I can tell is still the main program in their shift to XR software and backends and leaving hardware to partners.

Which anchors team?

MRTK - the Azure one is still alive