Days after axing thousands of jobs, Microsoft says AI helped save over $500 million

Microsoft has reportedly saved more than $500 million by deploying artificial intelligence tools across its operations, but the news hasn't landed well - especially with the thousands of employees recently shown the door.

During a recent presentation, Chief Commercial Officer Judson Althoff revealed that the tech giant slashed over half a billion dollars in costs at its call centers last year, citing AI's impact on productivity in sales, support, and software engineering, Bloomberg reported.

Also Read: Microsoft layoffs: Xbox executive suggests laid-off workers turn to ChatGPT for career advice

However, the timing of the announcement has sparked controversy. Althoff's remarks came just a week after Microsoft executed its third major round of layoffs this year, cutting over 9,000 jobs and bringing total job losses in 2024 to nearly 15,000.

The juxtaposition of celebrating AI-enabled savings while workers are being let go has drawn criticism from both inside and outside the company.

Tensions escalated when a now-deleted LinkedIn post by Xbox Game Studios producer Matt Turnbull attempted to soften the blow of job losses by suggesting tools like ChatGPT and Microsoft's own Copilot could help affected employees "manage the cognitive load" of being laid off.

Also Read: Microsoft lays off 830 employees in home state of Washington

The comment was widely viewed as out of touch and further deepened employee discontent.

While Microsoft has not confirmed whether the layoffs are a direct result of AI replacing human roles, the optics are hard to ignore.

The company posted a staggering $26 billion in profit and $70 billion in revenue in the most recent quarter. It has also overtaken Apple in market capitalization and trails only Nvidia in valuation - fuelled largely by its aggressive investment in AI, the report added.

Microsoft has earmarked a whopping $80 billion for AI infrastructure in 2025 and continues to court top-tier research talent, making its AI ambitions abundantly clear.

But for many former employees, the messaging around AI-driven efficiency is ringing hollow - especially when it comes on the heels of pink slips.

Also Read: Big Tech Layoffs: Microsoft to lay off 9,000 people in bid to rein in costs amid AI push