On June 3, Aaron Damigos’ inbox received a run-of-the-mill business update calendar invite: a meeting attended by HR, his boss, and senior management that would ultimately result in the abrupt end of his job as a web support associate at Microsoft.
Microsoft reportedly laid off around 1,000 people in early June from its mixed reality and Azure cloud divisions, as well as its Damigos consumer sales division. An email sent to employees from Jason Zander, Microsoft's executive vice president of strategic mission and technology, leaked to Business Insider, cited a shift in investments in artificial intelligence as the reason. “Our clear focus as a company is to define the wave of AI and help all our customers successfully adopt this transformative technology. Along the way, we will make decisions that align with our long-term vision and strategy while ensuring the sustainability and growth of Microsoft.”
Damigos, who lives in Tacoma, Washington, says he wasn't told that the push into AI directly led to his termination. His job was to help customers understand how to use Microsoft products. But as OpenAI's biggest backer, Microsoft is clearly committed to the technology. “I think the shift to AI work has unfortunately deprioritized some of the more customer-facing roles,” Damigos said. He documented his firing and has been showcasing his skills on TikTok. “I was helping people understand how to effectively use and understand the product.” He added that he felt his team had “huge potential” to improve Microsoft's customer experience, but that the company ultimately moved on to invest in other areas.
Microsoft would not confirm the authenticity of Zander's email. “Organizational and workforce adjustments are a necessary and routine part of running our business,” Microsoft spokesman Craig Cincotta said. “We continue to prioritize and invest in strategic growth areas to position ourselves for the future and to support our customers and partners.”
No one knows yet how AI will impact jobs in the long term, but most experts generally agree that AI won't replace most workers in the near future. “AI will reshape the labor market,” says Nick Bunker, director of economic research at job site Indeed. “It's just not clear how.” Some predict AI will create more jobs, but some workers are currently training their replacements. But the current layoffs show that AI hype, not future AI colleagues, could be the reason thousands of people lose their jobs.
Microsoft is not alone. Dropbox announced 500 layoffs in April 2023, with CEO Drew Houston acknowledging that AI played a role. “In an ideal world, we would simply move people from one team to another, and we've done that as much as possible,” Houston's statement said. “But our next phase of growth requires a different mix of skill sets, especially in AI and early-stage product development.” Meta's Mark Zuckerberg made similar remarks about staff cuts to invest in AI earlier this year, saying in a February post that “our primary goal is to build the most popular, cutting-edge AI products and services,” and that Meta was scaling back the company after a “year of efficiency.” Google is also pouring money into Anthropic AI development, with CEO Syndrome Pichai warning of continued cuts throughout 2024, which began in January. This comes despite Google reporting strong growth. “We are investing responsibly in our biggest priorities and the great opportunities ahead,” said Google spokesperson Bailey Thomson. In 2023 and 2024, several Google teams are making changes to “improve efficiency and make their work more efficient,” Thompson said. “This is helping us simplify our structure, increasing opportunities for employees to work on the most innovative and important advancements and our biggest priorities, and reducing bureaucracy and layers.”
