Microsoft Leverages AI to Save $500 Million Amid Layoffs
Microsoft internally shared that it is using AI to save hundreds of millions of dollars, even as the tech giant lays off thousands of workers.
During a presentation to staff this week, which was leaked to Bloomberg, Microsoft’s Chief Commercial Officer Judson Althoff said that AI tools are helping workers be more productive across the board, from sales to customer service. For customer service workers, Althoff noted that Microsoft saved more than $500 million last year in call center productivity and boosted employee and customer satisfaction with the interactions.
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As of January, Microsoft was on track to invest approximately $80 billion in AI infrastructure and other AI efforts for the fiscal year 2025. More than half of this investment is centered in the U.S. Microsoft’s most recent earnings, released in April for the quarter ending March 31, showed that revenue was $70.1 billion, up 13% year-over-year. CEO Satya Nadella attributed the results to “cloud and AI” growth.
On the sales side, Microsoft employees are using the company’s Copilot AI assistant to yield 9% more revenue by helping salespeople find more leads and close deals faster, Althoff said. However, Copilot has lagged behind ChatGPT in terms of mainstream adoption, drawing about 20 million weekly users globally compared to ChatGPT’s 500 million weekly users.
For software engineers, Althoff said that AI generates 35% of new code at Microsoft, shortening the time it takes new products to launch. Microsoft’s AI coding tool, GitHub Copilot, is a market leader, with 15 million users.
Althoff additionally stated Microsoft is generating tens of millions of dollars with a new effort to use AI to take over communication with smaller customers.
Microsoft Chief Commercial Officer Judson Althoff. Photographer: David Paul Morris/Bloomberg via Getty Images
As Microsoft doubles down on incorporating AI into its daily operations, the company is laying off employees. Last week, Microsoft announced that it was cutting around 9,000 staff members, about 4% of its global workforce. In May, the company laid off 6,000 employees, cutting hundreds more in June.
In June 2024, before the recent layoffs, Microsoft reported having a total global workforce of 228,000 employees, with 126,000 located in the U.S.
However, Microsoft denies that AI has led to layoffs. According to Bloomberg, Microsoft’s main lawyer, Brad Smith, said on Wednesday that AI was “not a predominant factor” in recent job cuts.
Microsoft is one of the most valuable companies in the world, second only to Nvidia, with a market value of $3.71 trillion at the time of writing.
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