AI saves $500 million for Microsoft as layoffs reshape strategy

AI saves $500 million for Microsoft as layoffs reshape strategy

Anabelle Colaco
12 Jul 2025, 08:39 GMT+10

AI saves $500 million for Microsoft as layoffs reshape strategy

Microsoft saved over US$500 million last year in its call centers alone by deploying AI tools, according to a Bloomberg News report
This boost in efficiency comes as Microsoft continues to trim its workforce
Last week, the company said it would cut nearly four percent of its employees. In May, another round of layoffs affected around 6,000 workers

REDMOND, Washington: Artificial intelligence is transforming Microsoft's bottom line. The company saved over US$500 million last year in its call centers alone by deploying AI tools, according to a Bloomberg News report published this week.

This boost in efficiency comes as Microsoft continues to trim its workforce. Last week, the company said it would cut nearly four percent of its employees. In May, another round of layoffs affected around 6,000 workers.

AI is playing a growing role across Microsoft's operations—from customer service and sales to software development. During a recent presentation, Chief Commercial Officer Judson Althoff said the company is using AI to manage interactions with smaller customers and improve productivity across departments, Bloomberg reported.

The early-stage rollout is already generating tens of millions of dollars, according to a person familiar with Althoff's comments. He also noted that AI now produces 35 percent of the code for new products, significantly speeding up development timelines.

Microsoft declined to comment when contacted by Reuters.

The company has allocated $80 billion in capital spending this fiscal year, most of it to expand data center infrastructure to support AI services.

Tech giants continue to bet heavily on artificial intelligence as a long-term growth driver—even as they scale back costs in other areas to protect profitability.

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