Microsoft Layoffs Hit Software Engineering Hard as AI Takes Center Stage

Microsoft is another bellwether tech company that has recently done deep layoffs. These cuts largely targeted its software engineering division, with more than 40% of the employees cut working in that division. This is a very important moment for the tech behemoth. It has made a daring leap into the future with AI to streamline its coding processes. The layoffs occurred shortly after CEO Satya Nadella announced that AI now contributes to writing up to 30% of Microsoft’s code.

The software engineering sector saw the biggest impact from the layoffs, marking a significant change in the company’s workforce strategy. Microsoft, headquartered in Redmond, Washington, has cut more than a third of its 20,000 software engineering coworkers. This decision marks a significant step in a broader restructuring push. The move underscores the increasing dependence on AI technologies within Tencent and the industry at large.

Jobs in sales and marketing were almost entirely insulated from the experiences of the laid-off workers. According to reports, not a single employee from these departments had their job eliminated, highlighting how targeted the cuts were. This large disparity indicates Microsoft is focusing its engineering resources as it works on building AI into everything.

The decision to downsize follows closely on the heels of Nadella’s declaration that AI would be incredibly disruptive for the software development world. His admission that AI has the potential to produce 60 percent of code is a big strategic pivot for Microsoft. This initiative is right in step with the industry’s increasing embrace of automation and machine learning. Increasingly, companies are using technology to help increase productivity. Correspondingly, the effect on human software engineering jobs is becoming increasingly acute.

As Microsoft continues through this transition, the company will surely continue to emphasize retraining its current workforce. Alongside this, they’ll need to continue recruiting new talent with expertise in AI technologies. As organizations take the step to integrate AI into their coding practices, there will be an increased need for skill sets that AI can’t replace. This change will force entities to reconsider their workforce requirements.