Aaron Damigos’ inbox was hit with a dreaded, ubiquitous business-update calendar invite on June 3. The meeting included someone from HR, his manager, and upper management—and ultimately resulted in the sudden end to his job as a web support associate with Microsoft.
Microsoft reportedly laid off some 1,000 people in early June, pulling from its mixed reality and Azure cloud departments, and also Damigos’ consumer sales division. An email to employees from Jason Zander, executive vice president of strategic missions and technologies at Microsoft, leaked to Business Insider, blamed a pivot to invest in artificial intelligence: “Our clear focus as a company is to define the AI wave and empower all our customers to succeed in the adoption of this transformative technology. Along the way, we make decisions that align with our long-term vision and strategy while ensuring the sustainability and growth of Microsoft.”
Damigos, who lives in Tacoma, Washington, says he wasn’t told that a push for AI directly led to the end of his job specifically, which involved helping customers understand how to use Microsoft products. But it’s clear that Microsoft, the largest backer of OpenAI, is all in on the tech. “I think the shift toward AI work has unfortunately led to the deprioritization of some essential customer-facing roles,” says Damigos, who has been chronicling his layoff journey and showcasing his skills on TikTok. “I helped people understand how to effectively use and understand the products.” He adds that he felt his team had “a lot of potential” to make a better customer experience for Microsoft—but ultimately, the company moved to make investments elsewhere.
Microsoft did not confirm the authenticity of Zander’s emails. “Organizational and workforce adjustments are a necessary and regular part of managing our business,” says Craig Cincotta, a Microsoft spokesperson. “We will continue to prioritize and invest in strategic growth areas for our future and in support of our customers and partners.”
No one knows yet quite how AI will impact work in the long term, but many experts largely agree that AI will not replace most workers anytime soon. “AI will reshape the labor market,” says Nick Bunker, director of economic research at the job board Indeed. “It’s just not clear how it will reshape it.” Some predict that it will create more jobs—but some workers are currently training their own AI replacements. But the layoffs happening now show that AI hype, not futuristic AI colleagues, can cause thousands of people to lose their jobs.
Microsoft isn’t alone. Dropbox announced 500 layoffs in April 2023, and CEO Drew Houston acknowledged that AI had played a role. “In an ideal world, we’d simply shift people from one team to another. And we’ve done that wherever possible,” Houston’s statement said. “However, our next stage of growth requires a different mix of skill sets, particularly in AI and early-stage product development.”
Meta’s Mark Zuckerberg made similar statements about cutting jobs to invest in AI earlier this year, saying in a post in February: “A major goal will be building the most popular and most advanced AI products and services,” as Meta left its “year of efficiency,” which resulted in downsizing the company.
Google, too, has funneled money into its Anthropic AI developments, and its CEO, Sindar Pichai, warned of continuous cuts throughout 2024, which began in January. That comes despite Google reporting strong growth. “We’re responsibly investing in our company's biggest priorities and the significant opportunities ahead,” says Bailey Tomson, a Google spokesperson. In 2023 and 2024, several Google teams “made changes to become more efficient and work better,” Tomson says. “Through this, we’re simplifying our structures to give employees more opportunity to work on our most innovative and important advances and our biggest company priorities, while reducing bureaucracy and layers.”
This pivot-to-AI narrative echoes past moves by tech companies, like outsourcing workers, which led to poor working conditions for some contracted workers in other countries. “It feels less like there’s a real connection between investment in AI and trade-offs having to be made in other parts of the workforce, but really that this is a narrative shift being used to package a shift that predates the move to AI,” says Parul Koul, president of the Alphabet Workers Union-CWA, which represents some employees from the companies affected by recent layoffs. But because workers don’t receive a lot of transparency about whether their layoffs are tied to AI, it’s still hard to tie some job cuts directly to the tech, Koul says.
The next step, naturally, would be to see the AI that these companies invest in further disrupt their own workplaces. But for now, that doesn’t seem to be happening. AI-fueled layoffs are making up a small portion of job cuts across industries. More than 5,000 jobs were cut between May 2023 and April 2024 where companies cited AI as the reason—but this was either due to companies shifting focus to developing AI tech or because they used AI tools to take over tasks and roles, according to a report from outplacement services firm Challenger, Gray, and Christmas.
In the tech world alone, there have been nearly 100,000 layoffs in 2024, according to Layoffs.fyi, a site that tracks job cuts in the tech industry. Still, specific types of jobs are beginning to bounce back. Openings for AI roles or those that require AI skills made up 12 percent of all tech job offerings in May—the largest percentage in six years—according to CompTIA, a nonprofit trade association for the US IT industry. But AI doesn’t exist in a silo, says Tim Herbert, CompTIA’s chief research officer, and its adoption will likely create adjacent jobs needed to support the new technology. “AI will probably spur investment in other areas,” he says.
The AI reshuffle may not be the great AI takeover, but if AI is the next big opportunity for companies like Alphabet, the lack of efforts to up-skill and train employees to work in those divisions is troubling, Koul says. “There are ways in which the existing workforce can be kept whole or treated with dignity and respect through this process,” Koul says. “A lot of my coworkers, a lot of our union members, work here because they are mission-driven, they believe in the utility of the products they are working on. More opportunities for retraining and moving people to other divisions would be very welcome.”
