CIOTech Outlook Team | Monday, 14 July 2025, 05:10 IST
Microsoft is urging employees to enhance their AI skills following significant workforce reductions in 2025. The company executed at least four major layoff rounds this year, eliminating over 15,000 positions across various divisions.
The latest layoffs, impacting approximately 9,000 jobs, heavily affected the Xbox gaming division and sales teams. Earlier layoffs included 6,000 positions in May, hundreds more in June, and about 850 in Washington State.
Julia Liuson, President of Microsoft's Developer Division, emphasized AI's critical role in a recent internal email, stating, "Using AI is no longer optional, it's core to every role and every level." She has given instructions to managers to weigh in on AI usage during performance reviews and this is a strategic change. Some teams are already considering particular metrics to track employee performance on the use of AI, and Microsoft is looking at more formal AI usage measures in employee reviews as early as the next fiscal year.
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The layoffs targeted traditional salespeople, with Microsoft aiming to replace them with technical "solutions engineers" skilled in demonstrating AI tools like Copilot to customers. In a memo sent before the latest layoffs, Sales Chief Judson Althoff outlined ambitions to become "the Frontier AI Firm" and "establish a Copilot on every device and across every role." This aligns with Microsoft's $80 billion investment in AI infrastructure this fiscal year, aimed at securing long-term AI market dominance while streamlining operations to manage costs.
Although Microsoft has been cutting its workforce, it is investing in reskilling its employees to keep up to date with the AI-driven world and become one of the leaders of the ever-changing technological space.
