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Last week, Bloomberg reported that Microsoft shared internally that it had saved $500 million in call center costs, thanks to AI -- shortly after the company laid 9,000 people off, the third round in a series of layoffs totaling 15,000.
What does this mean for the tech industry -- and job security for humans -- at large?
Also: 60% of managers use AI to make decisions now, including whom to promote and fire - does yours?
Microsoft's layoffs, despite huge profits
According to Bloomberg, Microsoft's chief commercial officer Judson Althoff shared in a presentation that AI tools were improving productivity across several teams, including sales, customer service, and engineering, noting AI had created over a third of the code for Microsoft's new products. Althoff noted AI had reduced customer service costs by over $500 million while upping employee and customer satisfaction.
The fact that Microsoft reported such positive numbers while still eliminating staff -- a move usually reserved for tougher financial times -- added insult to injury for many, especially as remaining execs used AI to generate hiring call graphics and suggested fired employees seek comfort from AI tools. Other reports suggest that many of those roles are being replaced with AI -- in some cases, AI that those now laid off helped to build.
The same week of the layoffs, in an announcement titled "Putting people first," Microsoft launched Microsoft Elevate and the AI Economy Institute. Elevate is a social impact fund through which Microsoft says it will "donate on a global scale more than $4 billion in cash and AI and cloud technology to K-12 schools, community and technical colleges, and nonprofits to help advance their missions." The AI Economy Institute, meanwhile, is a "corporate think tank" focused on "AI for good" initiatives.
Debate over AI's impact on jobs
The news comes as several tech companies and leaders have noted, in rapid succession, that AI is poised to replace at least some percentage of human personnel. In May, Anthropic CEO Dario Amodei said he expects AI will axe half of all entry-level white-collar jobs in the next five years while pushing unemployment up to as much as 20%. A recent survey found that 43% of managers who assessed whether AI could handle their direct reports' jobs went on to actually replace them with AI.
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