Microsoft Corp is planning to cut fewer than 2.5 percent of its workforce in the latest round of layoffs that could be announced as early as next week, Business Insider reported on Tuesday, citing sources.US companies have continued to trim headcount in the past few months, with a fresh wave of layoffs across the technology, media and finance sectors as firms rein in costs, while investing heavily in artificial intelligence (AI) infrastructure.The layoffs are expected to impact thousands of roles, including sales and consulting, as well as jobs at the Xbox gaming division, the Business Insider report said.
The Microsoft logo is pictured at offices in Issy-les-Moulineaux near Paris on March 25, 2024.
Microsoft declined to comment on the report.After investing heavily in AI, tech companies are now increasingly citing the technology as a factor for cutting their workforce. Meta Platforms Inc has announced plans this year to cut 10 percent of its workforce, and Amazon.com Inc has laid out plans to eliminate about 16,000 jobs globally. Top bankers at JPMorgan Chase & Co, Citigroup Inc and Goldman Sachs Group Inc have also said the technology would eliminate some jobs.
“It’s certainly making an impact as we speak in a way that no technology has before,” Challenger, Gray & Christmas chief executive officer John Challenger said. His firm, which tracks layoff plans, found almost 102,000 announced job cuts attributed to AI so far this year.The tech sector accounted for one-third of all layoffs this year. “Finance might be the next big sector that’s most affected,” Challenger said.Research suggests AI’s impact on the labor market depends on how companies deploy the technology. A study from Stanford’s Digital Economy Lab found employment has weakened in occupations where the technology automates tasks, while holding up in roles where AI helps employees in their job.Finance might be especially vulnerable because of its workforce composition. Office and administrative support occupations — including customer service representatives, bank tellers and insurance claims processors — account for about one-quarter of employment in financial activities, according to US Bureau of Labor Statistics (BLS) data compiled by Bloomberg. That share is larger than in any other major industry.And those occupations are projected to experience some of the largest employment declines over the next decade, in part because of AI, the BLS said.Additional reporting by Bloomberg
