2. Microsoft
Roles cut: 15,000
Why: AI transformation is “messy”
Microsoft’s transformation for the AI era “might feel messy at times”, CEO Satya Nadella acknowledged in a letter to staff in July following two rounds of swingeing layoffs.
Having cut 6,000 staff in May, the cloud and software giant then jettisoned a further 9,000 in July.
Although Microsoft hasn’t specifically blamed the cuts on AI, it’s true to say that it is using AI internally to become more efficient (with Nadella acknowledging in April that 20% to 30% of code inside the company’s repositories was written by AI).
The world’s second most valuable company is also investing record levels of Capex as it builds out more AI infrastructure.
In the letter, Nadella acknowledged the “uncertainty and seeming incongruence of the times we’re in”.
“We’re investing more in CapEx than ever before. Our overall headcount is relatively unchanged, and some of the talent and expertise in our industry and at Microsoft is being recognized and rewarded at levels never seen before. And yet, at the same time, we’ve undergone layoffs,” he wrote.
“This is the enigma of success in an industry that has no franchise value. Progress isn’t linear. It’s dynamic, sometimes dissonant, and always demanding.”
See next page for final AI-related vendor downsizing move…
