Record layoffs: Microsoft cuts nearly 10,000 employees amid AI adoption

Despite a market value of over $3.6 trillion and quarterly profits of almost $26 billion, Microsoft is laying off about 9,000 employees worldwide. The company explains this as restructuring, but the mass layoffs coincide with the widespread adoption of generative artificial intelligence, causing anxiety in the labor market. This is reported by UNN with reference to Gizmodo.

Details

The software giant, which plays a central role in the generative AI boom, confirmed to Gizmodo on Wednesday that it is "undergoing another major round of layoffs."

Although Microsoft did not provide an exact figure, saying it was "less than 4% of its workforce." However, Gizmodo estimates the total number of cuts at "approximately 9,000 jobs," based on internal announcements and previously reported cuts throughout the year.

As of June 2024, when the company last released data on its workforce, Microsoft had 228,000 employees.

According to the publication, the layoffs have so far occurred as follows: "less than 1% of staff were cut in January (related to performance), over 6,000 jobs were cut in May, and another 300 in June."

The total number of cuts for July will be about 8,777 jobs, or just under 4% of the global workforce

We continue to implement the organizational and personnel changes necessary to position the company and teams for success in a dynamic market

The cuts affect a range of levels, departments, and geographic regions. A source familiar with the matter told Gizmodo that "Microsoft's gaming division, which includes Xbox, is one of those affected."

Record profits

Microsoft is the second most valuable company in the world with a market capitalization of $3.65 trillion, second only to Nvidia. It is also in excellent financial health. In its latest fiscal quarter, its net profit increased by 18% to $25.8 billion, which the company announced in April. Revenue increased by 13 percent to $70.1 billion.

Cloud technologies and artificial intelligence are important resources for every business to expand production, reduce costs, and accelerate growth. From infrastructure and AI platforms to applications, we are innovating in all areas to empower our customers. These innovations can also lead to thousands of job cuts

While Microsoft does not officially link these job cuts to the rapid adoption of artificial intelligence, the timing of these moves raises questions.

At the Meta LlamaCon conference in April, Nadella told CEO Mark Zuckerberg that "20 to 30% of Microsoft's code is now written with AI tools."

Microsoft CTO Kevin Scott went even further, predicting that by 2030, AI will write 95% of all code used at the company.

Addition

The tech giant has invested billions in generative AI, particularly through its close partnership with OpenAI. This includes integrating large language models like GPT into Microsoft Office, GitHub, Azure, and Windows products. These tools are capable of writing, debugging, and deploying code, as well as handling administrative tasks, customer support, planning, and more. The company is betting that these technologies will change the way work is done. But for many workers, especially in the tech industry, AI is already replacing tasks and jobs.

Recall

Earlier, UNN wrote that Microsoft unveiled an AI system that diagnoses better than specialists, "solving" more than 8 out of 10 complex cases. Studies have shown that AI is significantly more accurate and effective than doctors in diagnosis.