AI savings net Microsoft $500M amid major job cuts

Microsoft saved over $500 million last year in its call centers alone as it moves to implement artificial intelligence (AI) in its customer interactions, Bloomberg News reported on Wednesday.

During a presentation this week, Chief Commercial Officer Judson Althoff said that Microsoft racked up the savings thanks to AI, allegedly improving both employee and customer satisfaction, a person familiar with the matter told Bloomberg. According to Althoff, AI tools are increasing productivity in everything from customer-facing roles to software engineering.

Althoff also shared that the company is starting to use AI for small customer interactions in an effort that already yields Microsoft tens of millions of dollars.

At Microsoft, AI is widely used — it generated 35% of the code for new products, accelerating launch times, according to Althoff.

Last week, the tech giant announced plans to lay off as much as 4%, or roughly 9,100, of its employees. Microsoft had also announced layoffs in May, which affected around 6,000 employees.

Microsoft’s top lawyer, Brad Smith, however, stressed on Wednesday that AI’s effectiveness was “not a predominant factor” in the job reductions of recent months, according to Bloomberg.

Althoff added that AI can be beneficial to employees, improving their sales metrics. For instance, he cited Microsoft’s Copilot AI assistant, which helps each salesperson find more leads, close deals quicker, and generate 9% more revenue.