In a startling reflection of today’s rapidly shifting tech landscape, Microsoft’s latest round of layoffs has targeted the very employees who helped the company advance its artificial intelligence ambitions. According to a report by CNBC, the company cut around 6,000 jobs globally, with over 40% of the layoffs in Washington state affecting software engineers many of whom had been actively integrating AI into Microsoft's development processes.
Bloomberg’s analysis revealed that numerous engineers were recently instructed to boost their use of OpenAI-powered chatbots, increasing the AI’s code contribution from 30% to as much as 50%. Just weeks later, those same teams were let go, raising serious concerns that workers were unknowingly accelerating their own redundancy.
Jeff Hulse, a Microsoft Vice President overseeing a team of 400 engineers, reportedly pushed hard for increased AI coding adoption — before his team was also disbanded in the cuts. The incident highlights what many are calling the double-edged sword of AI progress: productivity gains for the company, but painful consequences for human developers.
Engineers, Product Managers, and AI Staff Among Those Let Go
The layoffs went beyond software coders. Product management and technical program managers were also affected, as were some employees who had been directly working on AI initiatives. One notable exit was Gabriela de Queiroz, Director of AI for Startups at Microsoft, who expressed mixed emotions on social media, calling her layoff “bittersweet” and mourning the loss of passionate colleagues who “truly made a difference.” Meanwhile, sales and marketing teams those in customer-facing roles were largely unaffected, according to state records. This selective targeting further supports claims that the restructuring is less about streamlining management and more about redirecting resources toward AI expansion.
Microsoft’s official position is that the layoffs are part of a larger strategy to remove unnecessary management layers. However, internal data shows that only 17% of the Washington-based layoffs were managers, closely mirroring Microsoft’s broader managerial population. This suggests the core motive was not just organizational efficiency, but cost-saving amid skyrocketing investment in AI infrastructure, data centers, and partnerships, including the ongoing collaboration with OpenAI.
Employee Backlash and Ethical Concerns Grow
The impact has gone beyond spreadsheets. At Microsoft’s Build 2025 developer event, a protest broke out when a dismissed employee, Joe Lopez, interrupted proceedings to publicly criticize the company's AI contracts and layoffs. His actions echoed a growing sense of betrayal among former staff many of whom feel they were instrumental in ushering Microsoft into an AI-first era, only to be replaced by the very systems they developed.
Microsoft CEO Satya Nadella has previously praised AI's productivity potential, noting that in some internal projects, AI now writes up to a third of all code. While this showcases technological progress, it also underscores the sobering reality of automation displacing human jobs particularly in sectors like software engineering, once considered future-proof.
For many of those impacted, this isn’t just a layoff; it’s a wake-up call about the evolving relationship between humans and machines in the workplace. As companies like Microsoft continue to champion AI innovation, the tech world must grapple with urgent questions about ethical deployment, worker retraining, and long-term economic implications. The situation leaves former employees and the industry at large with one pressing dilemma: how to balance AI-driven efficiency with humanity-centered employment strategies.
