Mnementh said:
Ryuu96 said:
Sources tell me that Microsoft’s leadership team had the choice between reducing investment in AI infrastructure for the upcoming financial year or deeply cutting its headcount and operating expenses.
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They had to choose? I don't believe it. You tell me this company:

Could not afford investments in AI while keeping their employees?
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They could but they don't care, investing into AI and laying off employees is better for the Gods of infinite growth and their stock.
Bare in mind as well, OpenAI is losing billions every year which Microsoft is a major investor in, CoPilot is a joke that few care about and struggling to sell, it too is almost certainly losing money, they're planning an extra $80bn investment into AI for 2025, the vast majority of it will very likely not result in any profits, which will therefore hit their operating margins, so they "have" to make cuts elsewhere.
Of course they don't "have" to make the cuts, they'd still be filthy rich and make billions in profits but that's capitalism for you. Tom is just pointing out the fucked up decision making inside of Microsoft that is happening where they think it has to be a choice. Investing into AI will hurt their profit margins, so they cut back elsewhere.
After they've spent $80bn and received little profits, they will likely spend even more tens of billions in 2026 for further little profits. The costs of AI are enormous, nobody has a good business model for it yet, and it has hit a ceiling in technical ability without further massive, loss-leading investment, so Microsoft will be spending tens of billions every year on AI, which will obviously hit their profit margins, which means they'll "have" to make cuts elsewhere to make up for the losses due to AI otherwise profit margins go down.
Confirms what we all knew anyway, the cuts had nothing to do with performance. That's modern Microsoft for you though. If AI is successful then everyone is getting laid off. If AI is a bubble that bursts then everyone is getting laid off. If your business unit independent of AI is performing well and bringing in profits, you're still getting laid off for AI. If you don't use AI in your work, you're getting laid off for not using it. If you do use AI in your work, you're getting laid off to replace you with that AI.
Microsoft 2025: Whatever You Do and However Well You Do It, You're Still Getting Laid Off.
Last edited by Ryuu96 - on 18 July 2025