Microsoft shares $500M in AI financial savings internally days after reducing 9,000 jobs

Microsoft’s chief business officer Judson Althoff stated throughout a presentation this week that AI instruments are boosting productiveness throughout gross sales, customer support, and software program engineering, Bloomberg reviews. Althoff famous AI has been so helpful that Microsoft was in a position to save greater than $500 million final yr in its name heart alone. 

The interior remarks come every week after Microsoft laid off greater than 9,000 employees, the corporate’s third spherical of layoffs this yr that put the whole variety of affected workers someplace round 15,000. 

For workers who misplaced their jobs whereas working at an organization that’s reporting spectacular cost-savings and recording one among its most worthwhile quarters but, Althoff’s remarks would possibly come off as tone deaf. 

The scenario had already been sophisticated by a now-deleted LinkedIn put up from Xbox Recreation Studios’ producer Matt Turnbull, who final week advised that employees feeling “overwhelmed” by Microsoft’s layoffs — which included job cuts throughout Xbox — would possibly discover assist by means of AI instruments like ChatGPT and Copilot to assist handle the cognitive load that comes with job loss.

It’s not clear whether or not the hundreds of employees who misplaced their jobs this yr had been changed by AI or whether or not the layoffs signify post-pandemic right-sizing. What is obvious is that workforce changes throughout a interval of document profitability creates a difficult dynamic that, for some, has to sting.

Microsoft closed out the primary quarter with $26 billion in revenue and $70 billion in income. The corporate’s market capitalization has additionally surged in latest months to round $3.74 trillion, displacing Apple and trailing solely Nvidia.

Microsoft has signaled that a lot of that revenue will circulate immediately into AI. The corporate stated in January it might make investments $80 billion into AI infrastructure throughout 2025. Whereas Microsoft continues to rent expertise, too, the corporate seems positioned to extra actively take part within the industrywide competitors of “Who Can Pay High AI Researchers The Most?” Briefly, it’s extra seemingly we’ll see Microsoft spend thousands and thousands of {dollars} on prime AI researchers fairly than center managers and different workers.