Microsoft said last week it will eliminate about 4,800 jobs in a layoff round, even as the company remains profitable and keeps spending heavily on AI. For workers, the cut adds another wave of churn to a market where job reductions are no longer an exception.
Matthew Prince on Cloudflare layoffs
More than 20% is the share of Cloudflare’s workforce eliminated in May, a cut Matthew Prince said followed a pattern he had not seen before. In a op-ed, he wrote that Cloudflare had not seen another US public company cut as deeply while growing by more than 30%, and added: “Yet what we did is likely going to become the norm over the next year”.
Nearly 5% is the share Cisco said it would cut in May, the same quarter it reported record revenue for its fiscal third quarter. Chuck Robbins said the firms that will win in the AI era are those with the discipline to “continuously shift investment” toward areas with the greatest long-term potential. A Meta spokesperson said in a statement about its May layoffs that changes varied by team and included moving thousands of workers to other priorities, and Amazon said AI has not been the reason for the vast majority of its cuts over the past two years.
2022 to this year
Fewer than five is how many times per quarter layoffs were mentioned alongside AI on corporate conference calls in 2022, according to an AlphaSense analysis. That figure has climbed to more than 100 per quarter this year, showing how often companies now discuss staffing cuts while they keep pouring money into AI.
Joseph Fuller, a Harvard Business School professor, said companies may move toward smaller, recurring adjustments instead of sweeping layoffs. He called those recurring adjustments “continuous tuning,” said companies have spent roughly the last quarter-century cutting costs, and added that many AI tools are still in development, which leaves firms reshaping teams before the technology’s effect on work is settled.
Microsoft said its latest cuts are not related to AI, so the immediate issue for affected employees is a job loss tied to restructuring, not a direct product pivot. The larger question is how many more rounds of layoffs companies will make over the next year as they keep reorganizing around AI budgets without settling on how much work the tools will actually replace.
