“AI is changing how work gets done”: Microsoft insists 4,800 layoffs aren’t because of AI, but points to a shifting workforce

Microsoft just confirmed layoffs that affect close to 2.1% of the company’s workforce. 4,800 roles are being eliminated. Amy Coleman, Microsoft EVP and Chief People Officer, shared the news with employees in a letter that’s also published on Microsoft’s official blog.

The vast majority of the eliminated roles are from Xbox and gaming-related divisions. Our Managing Editor Jez Corden covered those cuts that make up the largest single staff reduction in Xbox history.

Other layoffs come mostly from Microsoft’s Commercial business.

The total number of layoffs was reduced by more than 30% of eligible employees accepting voluntary retirement.

Coleman emphasized that the roles that were just eliminated are not being replaced by AI. But in the next sentence, Coleman discussed how AI is reshaping work.

“I also want to be direct that the roles eliminated today are not being replaced by AI. At the same time, what is true is that AI is changing how work gets done. Some of the tasks we do every day can now be automated, and that means we all need to keep learning, keep building new skills, and keep adapting as the work evolves.”

Coleman was quick to declare that AI is not replacing roles, but the EVP and Chief People Officer mentioned AI several times in the letter. On top of AI shifting how companies work, it’s become a focus of training at Microsoft.

“As mentioned above, we are working on alternative solutions to job eliminations, and beyond this, we will continue to invest in equipping employees with new skills, including in AI,” said Coleman.

While Coleman did not blame AI for the layoffs, Microsoft leaders past and present have said AI will affect employees across sectors.

Microsoft co-founder Bill Gates has said that AI may replace jobs, though those comments were made in a general sense and not related to the recent layoffs at Microsoft (as a reminder, Gates is not involved in operations at the company).

Microsoft AI CEO Mustafa Suleyman said that AI will replace white-collar jobs in the next 12-18 months.

Even if these specific layoffs will not see roles replaced by AI, it’s clear that AI is shaping workforces and that it will likely cause roles to be eliminated in the future.