Microsoft is sacking another 9,000 workers or about 4% of its global workforce. That’s in addition to the 6,000 people dismissed earlier this year. What does that mean for us paying customers?
If you’ve wondered why Microsoft pushes Copilot AI so hard – it’s to recoup their incredibly large investment in AI.
One take is that Microsoft is struggling to reduce costs given their massive investment in AI infrastructure. All those new and expanded data centers cost billions. US$80 billion in the 2025 fiscal year alone. That investment will eventually pay off but the stock market wants results now, not later.
The recent staff cuts are mostly in the Xbox/gaming division however the effect is likely to be felt throughout the company including very profitable divisions like Microsoft Office. Past cuts have resulted in a drop in software reliability, especially software patches.
The company has also said that AI technology will increasingly be used for customer service and “handle interactions with smaller customers”. Microsoft claims to have saved $500 million last year by using AI in their call centers.
That’s in addition to the obvious use of AI in writing and managing coding with AI generating 35% of the code for new products. We’ve also seen (too) many Microsoft blog posts with obviously AI written text that lacks some human oversight.
A lesson for everyone
Microsoft says the dismissed employees should reskill in AI roles – which is good advice for anyone who works with a computer.
AI has a place for almost everyone using Microsoft 365 or Office, just probably not to the extent that Microsoft boasts. Copilot is being over-hyped in typical Microsoft style. That hype is sometimes counterproductive, and some people dismiss AI as just the latest fad.
Copilot isn’t the only AI game in town. Bloomberg reports that some organizations find that their staff prefer ChatGPT over Copilot. That’s understandable because ChatGPT is more flexible and less constrained than Microsoft’s conservative Copilot. People use ChatGPT at home and so they prefer that familiar system at work. Look to Microsoft pushing Copilot into Windows and mobile devices in an attempt to reverse that trend.
What’s the difference? Microsoft 365 Copilot app or the Copilot app.
