Microsoft has announced a 4% workforce reduction, driven by heavy investments in AI to reduce costs. This step has been taken as part of a strategy to simplify the organizational structure and protect margins.
Microsoft: Microsoft, one of the world's largest tech companies, is once again in the headlines, but this time the reason is layoffs. Amidst tremendous investment and competition in the field of Artificial Intelligence (AI), the company has once again decided to cut its workforce. Microsoft has confirmed that it is going to lay off approximately 4 percent (around 9,000 employees) of its global workforce.
This step is being taken at a time when the company's focus is on strengthening AI infrastructure, but at the same time, the pressure on costs and margins is rapidly increasing.
Heavy investment in AI, but why cut human resources?
Microsoft recently announced that it is going to spend up to $80 billion in capital expenditure for its fiscal year 2025, a large portion of which will be spent on AI infrastructure and cloud systems. With plans to support ChatGPT and other AI models through Azure cloud, the company's strategy is now focused on 'future technology'.
However, this massive investment is affecting the company's profit margins. Due to rising costs in cloud services, Microsoft is having to cut operational expenses, and the most direct impact of this is on its employees.
Changes in the organization: Management level to be reduced
Microsoft has clarified that these layoffs are not just for the purpose of cost-cutting, but are part of an organizational restructuring. The company's goals are:
- To reduce the management level, i.e., fewer managers and more independent teams.
- To streamline processes, thereby increasing both work speed and efficiency.
- To eliminate redundant roles, i.e., removing positions that are not needed.
This strategy demonstrates that Microsoft is shaping its workforce according to future needs, where AI and automation are going to play a significant role.
Cuts in Spain as well: Gaming unit affected
Microsoft's layoffs are not limited to the main office or headquarters. According to reports, the company's King division in Barcelona—which makes the famous game Candy Crush—is also laying off about 200 employees, which is 10% of the total workforce.
This shows that the company wants to limit operational costs not only in productivity tools or the cloud, but also in its gaming sector.
Other tech companies are also laying off
Microsoft is not the only company that is taking the path of layoffs amidst the growing investment in AI. This is becoming a widespread trend in the tech industry:
- Meta (Facebook): Planned to remove 5% of its underperforming employees earlier this year.
- Google (Alphabet): Laid off hundreds of employees in 2023.
- Amazon: Removed many employees in its book division, devices, and service unit.
These examples make it clear that balancing the cost of AI has now become a major challenge for tech companies.
Is the price of AI human jobs?
Microsoft's recent layoffs raise the question of whether investment in AI means that the human workforce is now becoming unnecessary? Are tech companies sacrificing their current resources in preparation for a future automated era?
Experts believe that there are certainly opportunities in AI-related jobs, but for that, it will be mandatory to equip existing employees with new skills. Otherwise, this change can only lead to layoffs and unemployment.
