In early July 2025, Bloomberg broke a surprising story: Microsoft saved over $500 million in call center costs, thanks to AI tools. This came right after the company laid off 9,000 employees, totaling more than 15,000 job cuts in just a few months. These layoffs occurred despite Microsoft reporting strong profits, raising serious concerns about the role of AI in the tech industry—and how safe human jobs really are.
Let’s break down what this means for workers, how AI is being used by managers, and what this signals for the future of employment in tech.
Microsoft’s $500 Million AI Boost
According to the report by Bloomberg, Judson Althoff, Microsoft’s chief commercial officer, said that AI tools helped improve productivity across key departments, including customer service, engineering, and sales. In fact, he noted that AI created more than one-third of the code for Microsoft’s latest products.
The most eye-catching number?
AI saved Microsoft $500 million in customer service costs alone.
This was made possible by using generative AI to handle customer queries, assist sales teams, and even write new product code. Customers were happier, support was faster, and employees could focus on higher-level tasks.
Sounds great—until you remember the layoffs.
Layoffs Despite Big Profits
Usually, companies cut jobs when they're struggling financially. But Microsoft isn’t. The tech giant continues to grow, especially in the AI space. Despite that, it laid off more than 15,000 workers this year, in three separate rounds.
This has left many wondering:
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If Microsoft is doing so well, why cut jobs?
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Are people being replaced by the very AI systems they helped create?
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Is this the new normal for tech companies?
Sadly, it seems the answer might be yes.
AI Replacing the Jobs It Was Built To Support
Multiple reports show that many of the roles eliminated at Microsoft are now being handled by AI systems. Some of the employees who were laid off had even worked on the very tools that replaced them. In one presentation, an executive said AI could “help reduce emotional load” and suggested that laid-off staff should seek comfort in AI-powered wellness tools.
This tone-deaf messaging caused backlash across tech forums and social media platforms. How could a company ask someone to use the tool that took their job—to feel better about losing it?
Managers Are Using AI to Make Big Decisions
Another growing trend is the use of AI in performance reviews, hiring, firing, and promotions.
A recent survey revealed that over 60% of managers now use AI to make important personnel decisions, including:
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Deciding who should be promoted
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Suggesting who might be underperforming
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Recommending layoffs based on "efficiency scores"
This raises a lot of ethical questions:
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Is it fair to let a machine help fire someone?
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Can AI truly understand human potential or challenges?
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Are we building a future where AI replaces managers too?
If your boss hasn’t started using AI to review your work—they might soon.
What Does This Mean for Job Security?
The biggest fear among employees is clear: "Will AI take my job next?"
The short answer is: it depends.
AI is great at doing repetitive or rule-based tasks, such as:
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Answering basic customer service questions
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Writing short emails or scripts
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Analyzing large sets of data
But it’s not great at creative thinking, deep problem-solving, or emotional intelligence—yet.
Still, as Microsoft has shown, even profitable companies may choose AI over humans, if it helps cut costs or boost productivity.
How to Prepare for the AI Job Future
Here are a few smart ways to stay ready:
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Learn how to use AI tools:
Get comfortable using AI like ChatGPT, Copilot, or Bard. Understanding these tools makes you harder to replace. -
Focus on skills AI can’t replace:
Human traits like creativity, leadership, empathy, and communication are still in high demand. -
Stay flexible and keep learning:
The job market is changing fast. Online platforms like Coursera, LinkedIn Learning, and Udemy can help you stay ahead. -
Talk to your manager:
If your company is adopting AI, ask how it will affect your role. Don’t wait to be surprised.
The Bigger Picture
Microsoft’s situation shows that AI is no longer just a support tool—it’s a core business decision-maker. That’s both exciting and scary.
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Exciting, because it brings new efficiency and innovation.
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Scary, because it puts millions of human jobs at risk—even in healthy companies.
This isn’t just a Microsoft story. Other tech giants like Google, Meta, Amazon, and Apple are also heavily investing in AI. And if the trend continues, more layoffs might follow—not because companies are failing, but because AI is simply cheaper.
Final Thoughts
The message from Microsoft is loud and clear: AI is here to stay. And it’s already saving companies hundreds of millions of dollars. But at what cost?
While AI has the power to improve work, we must ask how it's being used—and who it benefits. Workers must stay aware, stay educated, and stay human in a world that’s becoming more robotic every day.