Microsoft (MS) is preparing to make massive additional layoffs involving thousands of employees amid large-scale investments in artificial intelligence (AI).
According to Bloomberg News on the 18th (local time), sources said it is highly likely that MS will announce a restructuring plan early next month and that the layoffs will primarily affect the sales institutional sector, but not only the sales team.
As of June last year, MS had a total of 228,000 employees, of which 45,000 were in the sales and marketing institutional sector. The layoffs in May were the largest since 2023 when it cut 10,000 jobs. It was focused on the product and engineering sectors, while most of those who interact directly with customers, such as in sales and marketing, were reportedly excluded.
Bloomberg News reported that these layoffs are part of MS's efforts to reduce labor costs amid large-scale investments in AI. MS invests billions of dollars each year for AI infrastructure, and capital expenditures are expected to continue increasing in the new fiscal year starting next month. This has led to analyses that the prospect of job reductions due to AI rapidly infiltrating everyday life and workspaces is becoming a reality.
Andy Jassy, chief executive officer (CEO) of Amazon, the world's largest e-commerce company, stated in an email to employees the day before that "the overall administrative workforce will decrease due to the efficiency gained from widespread AI use across the company in the coming years." Dario Amodei, CEO of Anthropic, also noted recently that "AI could eliminate half of all new administrative jobs in the next five years and drive unemployment up to 20%." Duolingo, a foreign language learning service provider, has announced plans to gradually discontinue hiring contractual employees to perform tasks that AI can handle.