Microsoft has announced that the integration of artificial intelligence across its customer support and engineering divisions has led to savings exceeding $500(₹4,170 crore) million. The news comes in the wake of the company’s third round of layoffs in 2025, which has now impacted approximately 15,000 employees globally. While the cost-cutting benefits of AI are apparent, the timing of these layoffs raises concerns about the broader implications of large-scale automation.
A week prior to the announcement, over 9,000 employees were let go across several Microsoft divisions. This included staff from engineering, gaming, and cloud services. Internal reports suggest that Microsoft is shifting toward an AI-driven operating model, focusing on efficiency, speed, and revenue growth—sometimes at the expense of human jobs.
AI Now Writes 35% of Microsoft’s Code and Boosts Sales
According to internal remarks by Microsoft Executive Vice President Judson Althoff, AI now contributes to 35% of new software code written at the company. This rapid acceleration in development productivity is helping Microsoft roll out new products faster, reduce engineering hours, and boost returns.
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AI is also making inroads in sales enablement, with Microsoft’s Copilot AI assistant credited for increasing sales rep productivity. Reps using AI tools are reportedly identifying prospects more efficiently, closing deals faster, and witnessing a 9% increase in revenue. The company is especially targeting smaller business clients through automated, AI-led engagements, already generating tens of millions of dollars in revenue.
AI as Emotional Support: Xbox Executive Urges Laid-Off Workers to Lean on Tech
Amid mounting job losses, a controversial post from Matt Turnbull, Executive Producer at Xbox Game Studios, has attracted attention. In a now-deleted LinkedIn post, Turnbull addressed recently laid-off employees and suggested turning to AI chatbots like ChatGPT or Microsoft Copilot for emotional and career support.
He noted that while losing a job can be emotionally taxing, large language models (LLMs) could help ease the cognitive burden by assisting with resume writing, job searching, and career mapping. “AI isn’t a replacement for human support,” he emphasized, “but it can serve as a useful companion when one’s emotional bandwidth is stretched.”
His remarks highlight a growing trend of using AI not just for productivity, but also as a mental health coping mechanism—a move that has stirred debate on the appropriateness of replacing human empathy with artificial companionship.
A Double-Edged Sword
While Microsoft’s use of AI showcases its potential to drive unprecedented business efficiency, the juxtaposition of record layoffs and AI-driven growth raises difficult questions. Can companies truly balance innovation with human dignity? And is AI helping workers—or simply replacing them?
As Microsoft continues to expand its AI portfolio, industry watchers warn that the tech giant must tread carefully. The economic logic may be sound, but the ethical ramifications of AI-driven restructuring could define how the public—and future talent—view one of the world’s most powerful technology companies.