This week, Microsoft announced a new round of layoffs that will affect around 9100 employees across multiple divisions, including the Xbox teams, sales, and marketing. In total, the company will lay off more than 15,000 people through 2025.
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According to The Seattle Times, the cuts are part of Microsoft's desire to free up capital for massive investments in artificial intelligence. The company plans to spend $80 billion on AI infrastructure next year, up $25 billion from the previous fiscal year.
As The Seattle Times noted, Microsoft’s push into AI doesn’t mean the company is replacing employees with the technology. Instead, the significant costs of building out the infrastructure over several years has forced Microsoft to look for ways to cut costs wherever possible,.
They also note that the work of many laid-off employees can be automated or significantly simplified with the help of AI. Microsoft is actively investing in AI technologies that will allow writing and debugging code. According to rumors, the company even intends to make the use of AI mandatory for its employees.
The massive layoffs at Microsoft come amid one of its most successful years financially. As said, it affected a lot of company's divisions.
Turn10, the developer of the Forza Motorsport racing series, will lose almost half of its staff. The studio has been working on the Forza Motorsport series since the original game was released in 2005. The latest game was released in 2023 and was supposed to reboot the racing sim series. However, the project was unsuccessful. Interest in the game faded soon after its release, and numerous updates have failed to improve the situation.
Finally, in an internal email, Xbox Games Studio head Matt Booty confirmed the cancellation of games like Everwild, Perfect Dark, and other unannounced projects. That list apparently includes ZeniMax Online Studios' Project Blackbird.
The company's market capitalization has surpassed Apple and is second only to NVIDIA. Its strategy of aggressively investing in AI infrastructure and products is gaining support from shareholders.
The problem is that Microsoft has stopped seeing anything but AI in recent years. The company is seen rushing to implement AI in various products and services, regardless of whether it is ready for mass use.
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