Microsoft touts $500 million AI savings while slashing jobs

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Microsoft Corp. is keen to show employees how much AI is transforming its own workplace, even as the company terminates thousands of personnel.

During a presentation this week, Chief Commercial Officer Judson Althoff said artificial intelligence tools are boosting productivity in everything from sales and customer service to software engineering, according to a person familiar with his remarks.

Althoff said AI saved Microsoft more than $500 million last year in its call centers alone and increased both employee and customer satisfaction, according to the person, who requested anonymity to discuss an internal matter.

The company is also starting to use AI to handle interactions with smaller customers, Althoff said. This effort is nascent, but already generating tens of millions of dollars, he said.

Microsoft declined to comment.

Tech executives have been increasingly vocal about the potential for AI to automate labor currently performed by humans. Salesforce Inc. has said 30% of internal work at the company is being handled by AI, allowing it to reduce hiring for some roles. Executives at Alphabet Inc. and Meta Platforms Inc. have said significant chunks of code are now being written with AI.

At Microsoft, AI generated 35% of the code for new products, accelerating launch times, Althoff said. The company’s GitHub Copilot is a leader in the market for AI coding tools and has 15 million users, Microsoft said in April.

AI implementation has fueled replacement anxiety for many workers, particularly in the tech industry. Microsoft has announced cuts of about 15,000 employees this year, with a wave of layoffs last week targeting customer-facing roles like sales.

Althoff stressed to employees that AI could make them more effective as sellers. Through the use of Microsoft’s Copilot AI assistant, each salesperson is finding more leads, closing deals quicker and generating 9% more revenue, he said.

Productivity gains from AI were “not a predominant factor” in the job reductions of recent months, Microsoft’s top lawyer Brad Smith said Wednesday during an event announcing a donation of over $4 billion in cash and technology to schools with a focus on spreading AI skills.

— With assistance from Matt Day.