Microsoft leads tech companies in layoff of workers amid significant investments in AI

Mitrade
Trending Articles
coverImg
Source: DepositPhotos

Microsoft Corp. is making more cuts in addition to the 6,000 layoffs announced last month. This highlights the tech companies trimming costs even as they invest dollars into artificial intelligence.

A notice in Washington state revealed that more than 300 workers were informed yesterday that their positions had been eliminated.

Tech companies layoff workers amid significant investments in AI

The rise of AI has upended the tech job market, with companies doubling down on AI-related roles and deploying the technology to save money.

Microsoft and other firms, such as Meta Platforms Inc., have pointed to AI-backed coding tools as a way to accelerate software development. Last week, Salesforce Inc. said using AI internally has allowed them to require fewer employees.

Microsoft’s latest layoffs hit software engineers the hardest. This came after the job cuts that Microsoft Corp. announced on May 13 hit the people who built the company’s products. This was a sign that even software developers were at risk in the era of AI.

In the tech firm’s home state of Washington, software engineering was the biggest single job category to be issued with layoff notices, accounting for more than 40% of the roughly 2,000 positions cut.

Microsoft executives stated the reason behind the cuts. They said they wanted to limit spending due to large investments in the center’s construction.

Tech firms prioritize hiring in strategic areas such as AI

Aside from software engineers, many of those hardest hit at Microsoft were software project managers. Across the company, product management and technical program management roles accounted for almost 600 of the cuts in Washington, nearly 30% of the total.

The job cuts also included some managers and employees working on AI projects, according to a source familiar with the situation. 

Reliable sources suggest that few customer-facing jobs, such as sales and marketing, were the most affected. Microsoft did not respond to requests for comment.

Microsoft stated that the layoffs aimed to reduce layers of management. However, it remains unclear how much this restructuring was actually happening. Around 17% of the employees laid off in Washington were considered managers. 

At the end of 2023, the company had roughly the same percentage of managers across its workforce, based on a report submitted to the US Equal Employment Opportunity Commission. 

In addition to Microsoft, Salesforce Inc. planned to eliminate more than 1,000 jobs even though it hired AI-focused sales positions, including sales this year. CEO Marc Benioff said that the company also claimed to hire fewer engineers in 2025 due to using AI. 

Additionally, when Workday Inc. laid off staff in February, Chief Executive Officer Carl Eschenbach said hiring would continue in strategic areas such as AI.

Contrary to the cut and hiring on strategic areas trend, for software engineers, AI tools that can write or analyze code are now taking over parts of software development that engineers used to do by typing on keyboards. In April, Microsoft’s CEO Satya Nadella mentioned that AI is responsible for writing up to 30% of the code in some projects.


Read more

  • BNB Price Rebounds as Traders React to CZ’s Pardon — But One Roadblock Remains
  • BNB Price Rebounds as Traders React to CZ’s Pardon — But One Roadblock Remains
  • * The content presented above, whether from a third party or not, is considered as general advice only.  This article should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

    goTop
    quote
    Related Articles
    placeholder
    Trump team explores direct ownership in quantum computing firmsThe Trump administration is negotiating to take equity stakes in quantum computing firms in exchange for federal funding.
    Author  Cryptopolitan
    Oct 23, Thu
    The Trump administration is negotiating to take equity stakes in quantum computing firms in exchange for federal funding.
    placeholder
    Tesla Q3 Earnings Preview: Record Deliveries “Burn Out,” Growth Path Filled With UncertaintyTesla’s stock has rebounded over 85% in the past six months — the strongest recovery among the Magnificent Seven.
    Author  TradingKey
    Oct 22, Wed
    Tesla’s stock has rebounded over 85% in the past six months — the strongest recovery among the Magnificent Seven.
    placeholder
    BitMine and Strategy Capitalize on Market Weakness to Expand Crypto PortfoliosAfter the October crash shook global markets, crypto assets continued their volatile run, with Bitcoin (BTC) and Ethereum (ETH) still below their pre-crash levels.
    Author  Beincrypto
    Oct 21, Tue
    After the October crash shook global markets, crypto assets continued their volatile run, with Bitcoin (BTC) and Ethereum (ETH) still below their pre-crash levels.
    placeholder
    Japan stocks surge on historic appointment of Sanae Takaichi as first female PMSanae Takaichi became Japan’s first female Prime Minister after winning 237 votes in the Lower House.
    Author  Cryptopolitan
    Oct 21, Tue
    Sanae Takaichi became Japan’s first female Prime Minister after winning 237 votes in the Lower House.
    placeholder
    "No Kings" Protests: If It Persists, Sell U.S. Stocks and Buy Gold1. IntroductionTradingKey - On the morning of Saturday, 18 October, large-scale demonstrations broke out in multiple U.S. cities, where people protested against Trump's policies. Rallies were held in
    Author  TradingKey
    Oct 21, Tue
    1. IntroductionTradingKey - On the morning of Saturday, 18 October, large-scale demonstrations broke out in multiple U.S. cities, where people protested against Trump's policies. Rallies were held in
    Live Quotes
    Name / SymbolChart% Change / Price
    MSFT
    MSFT
    0.00%0.00

    Stocks Related Articles

    • Amazon Stock Analysis: How to Invest in Amazon Stock?
    • Best 15 ASX Lithium Stocks To Watch in 2024-2025 | Industry Overview & Stock List
    • GOOG vs GOOGL: What's the Difference? Which One Should You Buy?
    • What Is A Stock Dividend? Top 20 High-Dividend Stocks List For 2024
    • How To Buy Nvidia Stocks (NASDAQ: NVDA)? Are Nvidia Stocks Worth Investing In During 2024?
    • How to Invest in Stock Market for Beginners

    Click to view more