Microsoft’s AI saved $500M while thousands lost their jobs
Microsoft’s Chief Commercial Officer, Judson Althoff, stated this week that the company saved over $500 million in its call center last year through the use of AI tools. This announcement follows a series of internal remarks concerning productivity gains across sales, customer service, and software engineering, as reported by Bloomberg during a recent presentation.
The internal communication regarding cost savings occurred one week after Microsoft initiated its third round of layoffs this year, affecting more than 9,000 workers. These reductions bring the total number of affected employees to approximately 15,000 during the current year. This period of workforce adjustments coincides with Microsoft’s reported financial performance, including one of its most profitable quarters.
Further complicating the context of these layoffs, Matt Turnbull, an Xbox Game Studios producer, posted on LinkedIn last week (via The Verge) suggesting that AI tools such as ChatGPT and Copilot could assist workers feeling “overwhelmed” by job loss, including those impacted by cuts within Xbox. This post was subsequently deleted. The relationship between these layoffs and the integration of AI tools, or whether they represent post-pandemic workforce adjustments, remains unclarified.
Microsoft concluded its first quarter with $26 billion in profit and $70 billion in revenue. The company’s market capitalization has recently increased to approximately $3.74 trillion, positioning it behind Nvidia and surpassing Apple. Microsoft has indicated that a substantial portion of this profitability will be directed towards AI investments. In January, the company announced a plan to invest $80 billion into AI infrastructure throughout 2025. While Microsoft continues to recruit talent, its strategic emphasis appears to be on securing top AI researchers.