Microsoft is ramping up its integration of artificial intelligence (AI) across various functions, claiming substantial gains in efficiency and cost savings — even as it carries out mass layoffs.

In a recent internal presentation, Microsoft’s Chief Commercial Officer Judson Althoff revealed that AI-powered tools helped the company save over $500 million (approximately ₹4,285 crore) last year, primarily in its call centre operations. “The savings,” Althoff stated, “came alongside improved customer satisfaction and internal efficiency,” according to a Bloomberg report.

This announcement follows a major workforce reduction, with the company confirming the layoff of nearly 9,000 employees earlier this month. These cuts represent around 4 per cent of Microsoft’s global workforce and mark the company’s third significant round of layoffs in recent months.

Back in May, Microsoft also let go of about 6,000 employees, primarily from its engineering and product divisions.

AI Taking Over Key Roles

Microsoft is increasingly relying on tools like GitHub Copilot, its AI-powered code assistant, to streamline software development. According to the company, AI now contributes to writing 35 per cent of code for new products, helping accelerate time-to-market. GitHub Copilot currently has more than 15 million users globally.

In the sales domain, the company is using AI to enhance lead generation, close deals faster, and boost revenue. Internal reports show a 9 per cent increase in revenue tied to these AI implementations.

Additionally, Microsoft is testing AI capabilities in customer-facing roles, especially with smaller clients. These efforts are reportedly generating tens of millions in revenue.

A Broader Industry Trend

Microsoft’s move mirrors a larger trend across the tech industry, where companies are leveraging AI to reduce costs and improve productivity. Firms like Alphabet, Meta, and Salesforce have also adjusted hiring and job structures to incorporate more automation.

A Microsoft spokesperson explained that the layoffs are part of ongoing “organizational changes” aimed at reducing managerial layers and increasing efficiency through new technologies.

Microsoft CEO Satya Nadella previously shared that 20–30 per cent of the company’s code is now AI-generated, reinforcing the company’s deep commitment to this transformation.

While the financial benefits are clear, the transition is raising important questions about the human cost of AI adoption, as the technology reshapes not only Microsoft but the future of work across the tech sector.