Microsoft’s Surprising AI Layoffs: 6,000 Jobs Cut Amid AI Boom

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Introduction

In a move that has shaken the tech industry, Microsoft has announced its second-largest round of layoffs in company history, cutting around 6,000 jobs—nearly 3% of its global workforce. This development comes at a time when the tech giant is doubling down on artificial intelligence, a contrast that raises serious questions about its internal strategy and employee priorities. Among the high-profile departures was Gabriela de Queiroz, Director of AI for Microsoft for Startups, whose emotional farewell echoed across social media.

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Microsoft has initiated a major workforce reduction, laying off approximately 6,000 employees globally. This represents the company’s second-largest layoff event, trailing only the massive cuts of 2014. One of the most prominent figures affected is Gabriela de Queiroz, Director of Artificial Intelligence at Microsoft for Startups. She expressed her sorrow on social media, stating her heartbreak not only for her own dismissal but also for the talented coworkers who were let go.

Interestingly, these layoffs come during a period of aggressive AI expansion at Microsoft. CEO Satya Nadella recently disclosed that AI currently writes up to 30% of the code in various company projects, underscoring the irony of laying off AI-related personnel like de Queiroz. Software engineers were hit hardest, especially in Washington state, where Bloomberg reports they accounted for over 40% of local layoffs.

Despite being instructed to cease work immediately, de Queiroz stayed on for a short while to say her goodbyes and wrap up tasks. Her graceful departure contrasted with the impersonal nature of the layoffs. She emphasized her optimistic outlook and offered words of solidarity to the thousands affected.

Critics have highlighted the contradiction of letting go of skilled engineers while ramping up AI integration. Some insiders even reported a mandate to increase AI-generated code to 50%, shortly before entire engineering teams were dismissed. Microsoft has cited operational streamlining and management reductions as key reasons behind the cuts, which spanned departments, ranks, and locations. De Queiroz, like many others, remains hopeful about the future but acknowledged the uncertainty ahead.

What Undercode Say:

Microsoft’s decision to cut 6,000 jobs—even as it rides the wave of an AI revolution—sends a contradictory message to the industry and workforce alike. It reveals a growing reliance on AI tools at the expense of human roles, especially those once deemed critical to innovation.

From an analytical standpoint, these layoffs signal a pivot toward efficiency driven by automation. By urging teams to use AI to produce up to 50% of their code, Microsoft clearly indicates its desire to reduce labor costs and accelerate development cycles. However, such a strategy carries risks—namely, the loss of domain expertise, mentorship culture, and long-term software reliability.

Gabriela de Queiroz’s departure serves as a symbol of a deeper tension. As a respected AI leader and community advocate, her removal suggests that even those closest to Microsoft’s innovation engine are not immune. Her graceful exit highlights a broader theme: the human cost behind AI’s rise.

Microsoft’s layoffs

For startups and enterprise developers, this shake-up is a warning. Relying heavily on platforms that themselves are undergoing massive structural shifts can be dangerous. It also creates opportunities for new players to rise—those that offer stability, transparency, and ethical AI development frameworks.

The strategic inconsistency of laying off top AI talent while simultaneously pushing AI deeper into development pipelines can hurt Microsoft’s image. It might also have internal repercussions—lower morale, reduced trust, and potential brain drain to more employee-focused competitors.

In essence, this isn’t just about numbers. It’s about trust, vision, and how tech giants like Microsoft plan to balance AI’s promise with human impact. Will they lead the AI era responsibly or sacrifice talent in pursuit of faster results?

Fact Checker Results ✅✅✅

Microsoft did confirm the layoffs, citing operational restructuring 🌐
Over 40% of the cuts in Washington affected software engineers 👨‍💻
Gabriela de Queiroz personally confirmed her departure on social media 🧠

Prediction 🔮

If this trend continues, expect to see more companies aggressively automating development workflows while shrinking their engineering departments. AI may soon generate the majority of enterprise code, but that shift could backfire if it leads to code quality issues, innovation stagnation, or a talent exodus. Microsoft’s next steps—particularly in how it treats remaining employees—will determine whether it thrives or falters in the AI-first age.

References:

Reported By: timesofindia.indiatimes.com
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