Microsoft Cuts 9,000 Jobs Amid Major AI Investments

Microsoft has announced that it will lay off as many as 9,000 workers, marking a significant wave of job cuts this year. The technology giant is pivoting its focus to artificial intelligence (AI) and is set to invest $80 billion in large-scale data centers to train AI models.

The company stated that several divisions will be affected by the layoffs, though it did not specify which ones. Reports suggest that the Xbox video gaming unit may be among those hit. Microsoft spokespersons emphasized that these changes are necessary to position the company for success in a dynamic marketplace.

This round of cuts represents about 4% of Microsoft’s global workforce of 228,000 employees. The company has already initiated three other rounds of redundancies this year, including a May announcement of 6,000 job cuts. According to a database maintained by Washington state, more than 800 of the positions eliminated will be concentrated in the city of Redmond and Bellevue, major hubs for Microsoft.

In recent years, Microsoft has refocused its business on developing AI, including significant investments in data centers and advanced chip technology. Last year, the company hired British AI pioneer Mustafa Suleyman to lead its new AI division. A top Microsoft executive recently stated that the next half-century will be fundamentally defined by artificial intelligence, transforming the way we work and interact.

Microsoft is also a major investor and shareholder in OpenAI, the company behind the popular chatbot ChatGPT. However, the relationship between the two companies has reportedly grown tense in recent months. Bloomberg reported that Microsoft has struggled to sell its AI assistant, Copilot, to business customers, as many prefer ChatGPT.

These layoffs among rank-and-file workers at Microsoft come as major US tech companies intensify their efforts to attract top AI talent. Meta, the parent company of Facebook and Instagram, has been poaching talent from rivals to form a 'superintelligence' lab. CEO Mark Zuckerberg has been personally involved in recruitment efforts. OpenAI CEO Sam Altman recently noted that members of his team have received offers of more than $100 million as signing bonuses from Meta.

Amazon CEO Andy Jassy has also stated that he expects AI to replace some of his firm’s workers. As the tech industry continues to evolve, the competition for AI expertise and the impact on the job market remain significant areas of focus.