Microsoft's recent strategic overhaul underscores its commitment to artificial intelligence (AI), marked by significant workforce reductions and a mandate for employees to integrate AI into their daily operations.
In 2025, Microsoft has laid off over 15,000 employees, with the most recent round affecting approximately 9,000 positions, particularly within the Xbox gaming division and sales teams. These layoffs are part of a broader effort to streamline operations and reallocate resources toward AI development. The company has announced plans to invest nearly $80 billion this fiscal year in AI infrastructure, primarily to expand data centers and support AI services. (reuters.com)
Concurrently, Microsoft has made AI proficiency a core component of employee performance evaluations. Julia Liuson, President of the Developer Division, emphasized in an internal memo that using AI is now fundamental to the company's workflow, stating, "AI is now a fundamental part of how we work. Just like collaboration, data-driven thinking, and effective communication, using AI is no longer optional—it's core to every role and every level." (windowscentral.com) Managers are instructed to assess employees based on their effective use of internal AI tools, such as Microsoft Copilot, during performance reviews.
The company is also transforming its sales strategy by replacing traditional sales roles with technical "solutions engineers." These engineers are tasked with not only selling products but also demonstrating how Microsoft's AI tools can directly benefit customers. This shift aligns with Microsoft's ambition to become a "Frontier AI Firm," focusing on integrating AI across all facets of its operations. (ecommercenorthamerica.org)
These initiatives reflect Microsoft's aggressive push to embed AI into its corporate culture and operations. By investing heavily in AI infrastructure and making AI proficiency a performance metric, the company aims to position itself at the forefront of technological innovation. However, these changes also raise questions about the impact on employee morale and the broader implications for the tech industry as companies increasingly prioritize AI capabilities.
Source: Free Press Journal Microsoft Makes AI Skills Mandatory, 15,000 Jobs Cut As Company Shifts Focus To Future Tech
