Microsoft Australia staff to be affected by 4,800 global job cuts

Microsoft's Australian employees are set to be affected by the technology giant's latest global job cuts, which will see 4,800 positions eliminated worldwide. This represents about 2.1% of Microsoft's total global workforce, with the exact number and divisions impacted in Australia remaining unclear.

The layoffs come as the Big Tech sector faces increasing pressure to demonstrate profitability from massive investments in artificial intelligence, which are projected to exceed $1 trillion this year. Companies like Amazon and Meta Platforms have also implemented significant layoffs in 2024, mirroring trends seen with Australian tech firms Atlassian and WiseTech Global, where job cuts were attributed to AI replacing manual coding.

Despite the industry-wide shift, Microsoft's chief people officer, Amy Coleman, assured employees that the roles eliminated are not being directly replaced by AI. However, she acknowledged that AI is fundamentally changing how work is performed across the company. This announcement follows a restructuring of Microsoft's Xbox gaming division, which resulted in 1,600 immediate layoffs and the divestment of up to five studios, as the company seeks to improve returns in a highly competitive gaming market.

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The roles eliminated today are not being replaced by AI. At the same time, what is true is that AI is changing how work gets done.