Microsoft Saves $500M With AI While Cutting 9,000 Jobs

Microsoft has saved $500 million in one year by using AI tools in its daily work. This news was shared by Microsoft’s Chief Commercial Officer, Judson Althoff, in an internal meeting. The savings mostly came from using AI in Microsoft’s customer service call centers, as reported by TechCrunch.

This news came just a few days after Microsoft laid off 9,000 employees, bringing the total number of job cuts this year to approximately 15,000.

AI Helps Microsoft Save Time and Money

Microsoft is using AI tools like Copilot and ChatGPT to make work easier for its teams. These tools help answer customer questions, write emails, summarize problems, and suggest solutions.

In Microsoft’s call centers, AI helped customer service agents respond faster and more accurately. This saved the company over $500 million last year. According to reports, agents using AI could solve more problems in the first call and make fewer mistakes.

AI also helped new agents learn faster and become more confident. In total, Microsoft said over 43,000 support engineers started using AI tools in just a few months.

AI is also being used by Microsoft’s software engineers. In some teams, AI writes up to 35% of the code, helping engineers focus on more important tasks. Sales teams are also using AI to better understand customers and improve how they work.

Layoffs Create Mixed Feelings

While AI is helping Microsoft save money, the company has also cut 15,000 jobs this year. This includes roles in sales, engineering, and gaming teams like Xbox.

These layoffs happened around the same time Microsoft reported strong earnings. In its most recent quarter, the company made $70 billion in revenue and $26 billion in profit. Its total market value is now over $3.74 trillion, making it one of the biggest companies in the world.

Some people feel that announcing big savings and profits right after job cuts is unfair. A now-deleted LinkedIn post from an Xbox producer told laid-off employees to use tools like ChatGPT to cope with job loss. This message upset many who felt it was insensitive.

It’s not clear if AI directly caused the layoffs or if the company is just adjusting after hiring a lot during the pandemic. Still, many are worried about what these changes mean for workers.

A Big Investment in AI Is the Future

Microsoft is putting more focus on AI. In January, it announced plans to spend $80 billion in 2025 on building AI systems and data centers.

The company is still hiring, but the focus is now on AI experts and researchers. Roles in middle management or basic support may not be needed if AI can handle some of that work.

Microsoft believes that investment in AI infrastructure will make the company faster and more efficient. But this also means that fewer people may need to do the same work.

In the end, Microsoft’s use of AI is helping it save money and grow. But many are asking whether the human cost of these savings is too high.