Microsoft shares $500M in AI savings internally days after cutting 9,000 jobs

Microsoft’s chief commercial officer Judson Althoff said during a presentation this week that AI tools are boosting productivity across sales, customer service, and software engineering, Bloomberg reports. Althoff noted AI has been so useful that Microsoft was able to save more than $500 million last year in its call center alone. 

The internal remarks come a week after Microsoft laid off more than 9,000 workers, the company’s third round of layoffs this year that put the total number of affected employees somewhere around 15,000. 

For employees who lost their jobs while working at a company that is reporting impressive cost-savings and recording one of its most profitable quarters yet, Althoff’s remarks might come off as tone deaf. 

The situation had already been complicated by a now-deleted LinkedIn post from Xbox Game Studios’ producer Matt Turnbull, who last week suggested that workers feeling “overwhelmed” by Microsoft’s layoffs — which included job cuts across Xbox — might find support through AI tools like ChatGPT and Copilot to help manage the cognitive load that comes with job loss.

It’s not clear whether the thousands of workers who lost their jobs this year were replaced by AI or whether the layoffs represent post-pandemic right-sizing. What is clear is that workforce adjustments during a period of record profitability creates a challenging dynamic that, for some, has to sting.

Microsoft closed out the first quarter with $26 billion in profit and $70 billion in revenue. The company’s market capitalization has also surged in recent months to around $3.74 trillion, displacing Apple and trailing only Nvidia.

Microsoft has signaled that much of that profit will flow directly into AI. The company said in January it would invest $80 billion into AI infrastructure across 2025. While Microsoft continues to hire talent, too, the company appears positioned to more actively participate in the industrywide competition of “Who Can Pay Top AI Researchers The Most?” In short, it’s more likely we’ll see Microsoft spend millions of dollars on top AI researchers rather than middle managers and other employees.