Microsoft Corp. says its use of AI tools has already saved the company over US$500 million in call center operations last year, as the tech giant outlines the growing role of artificial intelligence in its business while cutting jobs.

Chief Commercial Officer Judson Althoff shared these insights during an internal presentation, according to a source familiar with the details.

AI tools have reportedly enhanced productivity in several areas, including sales, customer service, and software development.

Althoff said that AI saved the company over US$500 million in call center operations last year. It also improved employee and customer satisfaction.

He noted that AI-generated code comprises 35% of new product development, accelerating the time-to-market.

Furthermore, Microsoft has started using AI to manage interactions with smaller customers, generating tens of millions of dollars in revenue.

The company has not provided additional comments on this issue.

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🔗 Source: Bloomberg

🧠 Food for thought

1️⃣ Corporate AI savings don’t match the “not a factor in layoffs” narrative

Microsoft’s message that AI is “not a predominant factor” in cutting 15,000 jobs contradicts the specific productivity metrics they’re celebrating internally.

The company reports AI saved over $500 million in call centers alone, while simultaneously redirecting smaller customer interactions to AI, work previously handled by humans 1.

This trend extends beyond Microsoft, with Salesforce explicitly acknowledging reduced hiring needs for engineers and customer service roles due to AI implementation, resulting in 1,000+ layoffs and $50 million in savings 2.

The disconnect between corporate messaging and implementation reality reflects a broader industry trend where companies celebrate AI productivity gains while downplaying workforce implications. Research shows 92% of IT jobs will be transformed by AI, with mid-level (40%) and entry-level (37%) positions most affected 3.

Tech companies increasingly require cost justification for new hires based on AI capabilities, with firms like Shopify and Duolingo explicitly requiring employees to justify hiring needs against potential AI solutions 1.

2️⃣ AI job disruption follows historical patterns but with accelerated timeline

Microsoft’s experience mirrors the broader transition identified by McKinsey, which estimates 75-375 million workers globally may need to switch occupations by 2030 due to automation 4.

The World Economic Forum predicts AI could replace 85 million jobs by 2025 while creating 133 million new ones, suggesting a net positive but with significant displacement during the transition 5.

This transition pattern resembles previous technological revolutions like mechanized agriculture and industrial manufacturing, where job markets eventually stabilized but required massive workforce adaptation 4.

The key difference today is the accelerated timeline. Microsoft reports 35% of code for new products is already AI-generated, and sales staff productivity has increased 9% through AI assistance 6.

Unlike previous technological disruptions that primarily affected manual labor, AI is transforming white-collar work that was previously considered secure from automation, with significant impacts projected for data processing and customer service roles 7.

3️⃣ Productivity gains from AI show asymmetric distribution across industries

Microsoft’s reported $500 million in call center savings demonstrates how customer service is especially vulnerable to AI disruption, with entire interaction channels being automated 1.

Meanwhile, sales roles appear to be augmented rather than replaced. Microsoft reports salespeople using AI assistants find more leads and close deals faster, generating 9% more revenue 6.

This asymmetry appears across sectors, with McKinsey estimating AI could contribute $4.4 trillion in productivity growth potential through corporate use cases, but with highly uneven distribution 8.

The tech sector is experiencing this transformation first, with Microsoft, Alphabet, and Meta all reporting significant portions of code now written by AI. However, only 1% of companies consider their AI deployment fully mature 8.

Research suggests AI may democratize access to knowledge and skills, potentially boosting productivity more for lower-skilled workers than for those with specialized expertise, challenging assumptions about which jobs face the greatest disruption 7.

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