Think AI isn’t coming for your job? Think again. If the recent announcement of as many as 6,500 layoffs at Microsoft shows us anything, it is that you may work in an area in which employees are highly sought, and for a company that is the most valuable in the world with a market cap of over $3.3 trillion, but you still aren’t safe.
It’s notable that programmers – those who actually build the many products that Microsoft sells – have borne the brunt of the newly announced layoffs, at least in the company’s home state of Washington.
Software engineers make up more than 40 per cent of the 2,000 roles gone at the company’s HQ, according to state filings. Beyond coders, individuals working in related roles managing software projects, such as product and technical managers, account for a further 30 per cent of job losses.
The new job cuts come as Microsoft Ireland recently confirmed to the Business Post that a restructuring of its sales and marketing business to align it more closely with the UK operation is underway. While the company has downplayed the development, describing it as ‘business as usual’, it has caused concern among employees, suppliers and partners locally.
Unsurprisingly, Microsoft has declined to directly address speculation that the latest round of redundancies, which will wipe out up to 3 per cent of its total employee base, has anything to do with artificial intelligence (AI).
But its chief executive Satya Nadella recently admitted that up to 30 per cent of the company’s code is now written by AI. In addition, Keith Scott, the tech giant’s chief technology officer, last month forecast that as much as 95 per cent of Microsoft’s code will be AI-generated within five years.
Rather than admit what we all know, which is that no one’s job is safe in a world in which AI dominates, Scott suggested that software engineers would still very much be in the loop, but others strongly doubt this. OpenAI chief executive Sam Altman has suggested that the “one-person unicorn” will soon be upon us. In his vision of the future, companies will soon be able to reach a $1 billion valuation with just one employee as AI will do almost everything else.
In its announcement last week, Microsoft claimed the new layoffs are aimed at reducing management layers.
“We continue to implement organisational changes necessary to best position the company for success in a dynamic marketplace,” it said.
There aren’t many people buying the line that AI isn’t the cause for the new round of redundancies, not least as it coincides with other tech companies like Salesforce and Workday also slashing headcount in recent months.
Even still, this latest round of job losses took techies by surprise. Primarily because, unlike many of its ‘Magnificent Seven’ rivals, Microsoft has been on a roll of late.
While Apple and Nvidia, in particular, have gotten bogged down due to tariffs, Microsoft recently surpassed Wall Street’s expectations for the fourth quarter in a row. What's more, its cloud business Azure is booming, and it is making inroads in terms of AI dominance, even as it renegotiates its partnership with OpenAI.
As if that weren’t enough, in annoucing plans to scale back somewhat on investing in data centres recently, the company is showing the type of financial prudence that investors can’t get enough of.
The layoffs may be partly to do with this as shareholders have been putting pressure on tech companies to do more with less ever since Elon Musk showed you can slash your workforce and still continue to operate, albeit with a solution that is a horror show.
What’s more likely though is that Microsoft is simply preparing for a future in which AI will play a dominant role at the expense of humans.
The tech giant, which is currently marking 50 years in business, and 40 years in Ireland, hasn’t always been ahead of the curve, as was particularly evident during the period when Steve Ballmer ran the company. But Nadella has rejuvenated what had become a bloated behemoth. His primary objective is to ensure it will continue to thrive, and that means operating with a slimmed-down workforce, as AI agents take over roles that humans used to do.
So where does that leave the Irish operation, which currently employs around 6,000 people between Microsoft and its subsidiary, LinkedIn? The company hasn’t divulged how many jobs are to be cut locally, but it is believed around 100 roles will be impacted.
While these are unlikely to be restricted to those operating solely in software, the cuts, along with the moves to restructure the Irish operation, indicate that Microsoft is planning on having a much smaller footprint both in Ireland and elsewhere.
They also highlight the new reality, which is that no matter what type of work you are engaged in there is no guarantee that you’ll still be doing it in the future.