After laying off 9,000 employees, Microsoft achieves $500 million in savings

                                                                                    Its market value has surpassed Apple's                                                                                

After laying off 9,000 employees, Microsoft achieves $500 million in savings

Microsoft's chief commercial officer, Judson Althoff, stated during a presentation this week that artificial intelligence tools are boosting productivity in sales, customer service, and software engineering.

Althoff noted that AI has been so useful that Microsoft saved more than $500 million last year in its call center alone.

These internal statements come a week after Microsoft laid off more than 9,000 employees, the company's third round of layoffs this year, bringing the total number of affected employees to approximately 15,000, according to a report published by TechCrunch.

For employees who lost their jobs while working for a company announcing impressive cost savings and recording one of its most profitable quarters to date, Althoff's statements may seem exaggerated.

The situation was further complicated by a now-deleted LinkedIn post by Xbox Game Studios producer Matt Turnbull last week, in which he suggested that workers feeling "burned out" by Microsoft's layoffs—which included Xbox job cuts—could find support through AI tools like ChatGPT and Copilot to help manage the cognitive load associated with job losses.

It's unclear whether AI has replaced the thousands of workers who lost their jobs this year, or whether the layoffs represent a post-pandemic workload adjustment. What is clear is that workforce adjustments during a period of record profitability are creating a challenging dynamic, which may be painful for some.

Microsoft closed the first quarter with $26 billion in profits and $70 billion in revenue.Its market capitalization has also surged in recent months to around $3.74 trillion, surpassing Apple, trailed only by Nvidia.

Microsoft has indicated that a significant portion of these profits will be allocated directly to AI. The company announced in January that it would invest $80 billion in AI infrastructure through 2025.

As Microsoft continues to hire talent, the company appears poised to more effectively participate in the industry-wide competition over who pays the highest salaries to top AI researchers. We're likely to see Microsoft spending millions of dollars on top AI researchers rather than middle managers and other employees.