Microsoft plans to cut thousands of jobs, mainly within its sales teams. The company wants to shift its focus to AI investments. It is not alone in this: competitor AWS also plans to lay off staff and replace them with AI.
Amazon CEO Andy Jassy said Tuesday that the AI rollout will lead to a reduction in the company’s workforce in the coming years. According to Bloomberg sources, Microsoft is also working on a similar initiative, which will see thousands of jobs in the sales department disappear.
The upcoming layoffs follow earlier cutbacks by Microsoft in May, when approximately 6,000 employees lost their jobs. The company is increasing its investments in AI in order to strengthen its position. Now that it is increasingly distancing itself from OpenAI, the former supplier of the AI technology that made Copilot possible, this may well be necessary.
Big money for data centers
Microsoft is expected to spend $80 billion on capital expenditures this fiscal year. Most of this amount will go toward expanding data centers, including in Europe. The company wants to remove the limitations on AI adoption.
Microsoft had 228,000 employees on its payroll in June last year. The company declined to comment to Bloomberg on the reports of the upcoming layoffs. According to sources, the exact timing and scale are still subject to change, which is usual for such decisions before they are final.
The layoffs are expected to be announced early next month, shortly after the end of Microsoft’s fiscal year. It is still unclear whether all the jobs that will be lost are in sales.
Microsoft is far from the only company cutting its workforce this year. IBM has taken the same step, as have Intel and WordPress creator Automattic.