Microsoft has reached a huge milestone — it’s now valued at over $4 trillion. That’s a huge achievement for the company and its stockholders. Its latest quarterly results show strong growth. Revenue hit $76.4 billion, which is an 18% jump from the year before. Net income was $27.2 billion, up 24%. Most of this growth came from the company’s cloud and AI businesses. Microsoft’s cloud service Azure now brings in $75 billion a year, a 34% increase. Thanks to these results, Microsoft joins Nvidia as one of the few companies valued at over $4 trillion.

But behind these impressive numbers, there’s a more complicated story. Microsoft has laid off around 25,000 employees this year. That’s about 4% of its workforce. The cuts happened across many parts of the company, including Xbox, engineering, and management. The main reason isn’t poor performance. Instead, Microsoft is betting big on artificial intelligence. The company plans to invest about $80 billion into AI, hoping it will pay off in the future.

Microsoft’s CEO, Satya Nadella, acknowledged this paradox. He said it’s strange to lay off workers even when the company is thriving. He described it as “the enigma of success” in the tech world, where constant change is necessary even when things seem good. Nadella expressed gratitude to the employees who left, saying their contributions built the foundation of the company. It’s a reminder that these layoffs are part of a broader strategy to shift focus to AI and new technology.

Many other tech giants are also trimming staff to focus on AI. IBM has cut 8,000 jobs so far this year. The company is replacing some clerical roles with AI, like using its AskHR chatbot to handle HR tasks. Similarly, Meta plans to cut 5% of its staff in 2025 as it moves away from its failed metaverse projects and toward AI development. Amazon’s CEO, Andy Jassy, has said that as they introduce more AI tools, fewer people will be needed to do certain jobs. This trend is not limited to the U.S. either.

In India, Tata Consultancy Services has let go of 12,000 workers this year because their clients are shifting to AI, reducing the outsourcing work TCS used to do. In Japan, Indeed and Glassdoor’s parent company laid off 1,300 employees, about 6% of their staff. The CEO, Hisayuki “Deko” Idekoba, said AI is changing the world. Overall, around 130,000 tech jobs have been lost this year, according to The Bridge Chronicle. Meanwhile, tech job postings are down 36% compared to early 2020, making job hunting tougher.

For many workers, these layoffs mean saying goodbye to high-paying jobs. While there’s talk of huge AI jobs with salaries reaching $100 million, most workers are losing their six-figure salaries or their regular clerical incomes. The question is: will AI really work as promised? Some tasks, like repetitive HR work or basic customer service, can be replaced by AI. Companies have been doing that for years by outsourcing jobs to cheaper countries. Now, AI is seen as the next cost-cutting tool.

But can AI replace skilled workers? That’s a different story. Take programmers, for example. According to the 2025 Stack Overflow Developer Survey, 84% of developers use or plan to use AI tools. Yet, nearly half of them don’t trust the results AI gives. They spend a lot of time fixing mistakes made by AI. AI programming tools are useful but not reliable enough to replace experienced developers. Recently, a big AI coding platform, Replit, caused a major database error trying to build a new app, showing how imperfect AI still is.

The bottom line is that AI isn’t yet ready to replace highly skilled workers. Companies like Microsoft might find that out the hard way. While cutting costs with AI is popular now, if the technology doesn’t deliver, hiring back experienced employees won’t be easy. For many, AI is still more of a shiny promise than a reliable workhorse. Right now, AI might be good at convincing people it’s helpful, but when it comes to complex technical tasks, it’s still got a long way to go.

Inspired by

• https://www.computerworld.com/article/4032921/microsoft-tops-4t-in-valuation-great-news-for-the-company-not-so-great-for-its-workers.html

Sources

• gmpg.org
• shutterstock.com
• intertek.com
• microsoft.com
• businesstoday.in