Microsoft Lays Off Staff as Savings From AI Top $500 Million

Microsoft is ramping up internal use of artificial intelligence (AI) tools to cut costs and increase productivity, even as the company trims thousands of jobs across departments.

According to Bloomberg, Chief Commercial Officer Judson Althoff told employees in a recent presentation that AI is enhancing productivity across functions, including sales, customer service and software development, according to a person familiar with his remarks.

AI helped Microsoft save more than $500 million last year in its call centers alone and improved both employee and customer satisfaction, the person said.

The company is also using AI to manage interactions with smaller clients — an initiative that is still early-stage but already generating tens of millions of dollars in revenue, according to the same person.

Read more: Microsoft’s Nadella: AI Agents Serve as ‘Chiefs of Staff’

At the same time, Microsoft has announced job cuts of about 15,000 so far this year, with the latest round affecting customer-facing roles such as sales. The layoffs have raised concerns about AI displacing workers — a trend echoed across the technology sector.

Salesforce has relegated 30% of its internal work to AI, enabling it to reduce hiring for some positions.

Tech isn’t the only industry facing the potential impact of AI in the workplace. Ford, JPMorgan and other companies have warned of the possibility of deep job cuts as AI continues to advance.

Read more: Microsoft to Cut 3% of Workforce While Reducing Management Layers

Althoff said Microsoft’s AI tools, including its Copilot assistant, could make them more effective salespeople. He said each seller is finding more leads, closing deals quicker and generating 9% more revenue with Copilot’s help.

Microsoft said in April that its GitHub Copilot has 15 million users and noted that AI now generates 35% of the code for new products, helping speed up development.

Other technology companies are making similar moves: Executives at Alphabet and Meta have noted that AI is now responsible for writing substantial amounts of code.

Microsoft declined to comment.

Read more: Microsoft Cuts Nearly 9K Jobs in 2025’s 4th Round of Layoffs