Microsoft Lays Off Thousands of Workers

Microsoft Corp. (NASDAQ: MSFT) has quietly laid off thousands of workers in the past two months. No one outside the company seems to know why. It may mean nothing at all. Microsoft has 228,000 people.

According to Bloomberg, artificial intelligence (AI) may be a contributing factor to the reductions: “Microsoft Corp. cut hundreds more jobs just weeks after its largest layoff in years, underscoring the tech industry’s efforts to trim costs even as it plows billions of dollars into artificial intelligence.”

CEO Satya Nadella recently said that AI writes 30% of Microsoft’s code. In a public conversation, he told Meta chief Mark Zuckerberg, “I’d say maybe 20%, 30% of the code that is inside of our repos today and some of our projects are probably all written by software.” He is not alone. Nvidia CEO Jensen Huang has suggested that AI can perform coding tasks that humans currently do.

There is a debate about which jobs across the economy will eventually be handled by AI. McKinsey and Goldman Sachs have estimated the figure to be over 25%. They forecast that it could happen in the next two decades.

What remains unclear is what jobs AI will replace. Some think it will be entry-level management jobs. Others believe AI will be able to write legal briefs. Still others feel that AI can diagnose diseases more effectively than doctors and be more effective in medical research. And others think the need for software programmers will disappear. In other words, the tech workers that build AI software today will be replaced by AI tomorrow.

If Microsoft can cut thousands of jobs by replacing them with AI applications, most other large tech companies that have employees performing similar tasks will be able to cut staff as well. If so, layoffs across the tech sector could be massive.

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