Microsoft (MS) has announced a large-scale layoff, with about half of the cuts occurring in the software engineering sector. Recently, as corporations actively adopt artificial intelligence (AI), adjustments in the workforce of AI developers have begun in earnest. The industry believes that as simple coding jobs become replaceable by AI, the capabilities of developers will become even more crucial.
On the 16th, according to reports from IT media TechCrunch and others, MS announced on the 13th (local time) that it would lay off 6,800 employees, which is 3% of its workforce. This is expected to be the largest workforce reduction since laying off over 10,000 employees in 2023. MS noted, "We are continuously restructuring to succeed in a dynamic market environment." Since January, MS has conducted small-scale restructuring based on performance every year. The company emphasized that this layoff is unrelated to performance.
At the same time, MS indicated that one of the goals of the layoffs is to "reduce unnecessary management layers," suggesting that the cuts will focus on management positions and non-developer roles. According to a document filed by MS in Washington State, 40% of the layoffs are in the software engineering sector, making it the largest share. This is followed by middle management positions, such as product management and technical program management, at 30%. The layoff rate for developers is higher than that for non-developers.
Reports indicated that this outcome was somewhat anticipated. Since early this year, it has been assessed that software developers in the U.S. are facing the worst job market in history. According to data from the Bureau of Labor Statistics (BLS), employment for computer developers in the U.S. is projected to decrease by 27.5% from 2023 to 2025, reaching its lowest level since 1980. Indeed, a prominent job platform in the U.S., reported that while overall job openings in February increased by 10% compared to a year ago, job postings for software developers decreased by 35%.
This is due to the recent active adoption of AI by corporations, which has led to a significant adjustment in the developer workforce. Indeed, top executives of global corporations have stated that job replacements in technical fields will occur with the introduction of AI. During the AI conference Lamacon held last month, Satya Nadella, MS CEO, noted, "30% of the code written at MS was created by AI." Mark Zuckerberg, CEO of Meta, stated, "By next year, about half of the development will be done by AI instead of humans, and this ratio is expected to increase," and added that the company is focused on cultivating machine learning engineers who will advance AI itself.
The industry believes that simple coding tasks will be replaceable by AI in the future, making developers' capabilities all the more important. For developers, coding is basic knowledge, and beyond that, a comprehensive expertise is required to build successful systems by utilizing human and material resources. The U.S. Bureau of Labor Statistics forecasts that coding-related jobs will decrease by 10% by 2033, while the demand for developers who manage programming as a whole—beyond simple coding—is expected to increase by 17%.