Microsoft Reveals $500 Million AI Savings, Days After 9,000 Layoffs

Microsoft reportedly saved over $500 million in the past year using artificial intelligence in its operations, days after laying off nearly 9,000 employees.

In an internal meeting, Microsoft’s Chief Commercial Officer Judson Althoff revealed that the company saved over $500 million (around Rs 4,100 crore) in customer support services last year, reported Moneycontrol. These savings were largely driven by the use of AI tools across sales, support, and engineering functions.

The update was shared just a week after the company laid off around 9,000 workers across departments, including Azure, HoloLens, and mixed reality. Earlier this year, Microsoft confirmed cutting over 1,900 jobs in its gaming division, including at Activision Blizzard.

Employee Reactions and Timing Under Fire

While the company says the job cuts are due to post-pandemic adjustments and role duplications, the timing of the AI savings announcement has sparked internal and public criticism.

In one case, an Xbox producer’s LinkedIn post (now deleted) suggested laid-off employees could use AI tools like ChatGPT and Microsoft Copilot to “manage the cognitive load” of being let go. The remark was not received well by many, including current employees.

Microsoft declined to comment when asked about the statement, and no further details were given on whether those savings directly influenced the company’s layoff decisions.

Big Numbers, Bigger Shifts

The tech giant continues to invest heavily in AI infrastructure and integration. Microsoft has already committed over $80 billion this year toward AI development and operations.

Last quarter, the company reported $70 billion in revenue and $26 billion in net profit. It also briefly overtook Apple in market valuation, holding the second-highest spot behind Nvidia.

technology