Microsoft has internally shared $500 million in AI savings since cutting 9,000 jobs

In a presentation this week, Microsoft’s Chief Commercial Officer Judson Althoff said that AI tools are increasing productivity across sales, customer service and software engineering, Bloomberg reports. Althoff said that because AI is so convenient, Microsoft was able to save over $500 million in call centers alone last year.

The internal remarks come a week after Microsoft fired more than 9,000 workers. This was the company’s third round layoff this year, bringing the total number of affected employees to about 15,000.

For employees who have lost their jobs while working for a company that reports impressive cost savings and records one of the most profitable quarters, Althoff’s remarks can be deaf tone.

This situation is already complicated by a now-deleted LinkedIn post from Xbox Game Studios producer Matt Turnbull. MattTurnbull suggested last week that workers (including jobs across Xbox) who feel “overwhelmed” by Microsoft’s layoffs (including jobs across Xbox) could find support through AI tools such as ChatGpt and Copilot.

It is not clear whether the thousands of workers who lost their jobs this year have been replaced by AI, or whether the layoffs represent the correct sizing after the pandemic. What is clear is that adjustments to the workforce during a period of record profitability create challenging dynamics that some have to sting.

Microsoft closed the first quarter with $26 billion in profits and $70 billion in revenue. The company’s market capitalization has skyrocketed to around $3.74 trillion in recent months, replacing apples and tracking only Nvidia.

Microsoft has shown that much of its profits flow directly to AI. The company said in January it would invest $80 billion in AI infrastructure over 2025. Microsoft continues to hire talent, but it appears that the company is becoming more active in the industry-wide competition that “the best pays top researchers.” In short, Microsoft is more likely to spend millions of dollars on top AI researchers rather than middle managers and other employees.