Microsoft is reportedly planning to lay off thousands of employees, primarily in its sales division, as the company continues to invest heavily in artificial intelligence (AI). This move follows a previous round of layoffs in May that impacted around 6,000 workers, or about 3% of its workforce. Microsoft CEO Satya Nadella had framed the earlier layoffs as part of restructuring efforts rather than a reflection on employee performance.
The new layoffs, which are expected to be announced early next month after Microsoft’s fiscal year ends on June 30, are not limited to sales teams. As of June last year, Microsoft had approximately 228,000 employees. While the company hasn’t directly linked the job cuts to its AI investments, observers believe the transition to AI-driven automation is influencing Microsoft’s workforce planning.
This fiscal year, Microsoft has allocated $80 billion for capital expenditures, mainly to expand data centers to support its AI services. The company’s move comes as other tech giants are also navigating the impact of AI on their workforces. Amazon CEO Andy Jassy recently shared his thoughts on how generative AI might affect Amazon’s workforce, noting that while certain roles may decline, new positions will emerge. Jassy believes that AI adoption will likely lead to a reduction in Amazon’s overall workforce due to increased efficiency.
As tech companies like Microsoft and Amazon continue to invest in AI, the industry is bracing for significant changes in workforce dynamics. Microsoft’s upcoming layoffs highlight the challenges companies face in balancing technological advancement with workforce needs.
