Company Update: Microsoft lay off 10,000 workers while investing 10 billion in OpenAI.co.
On 1.18, Microsoft announced that it will cut 10,000 jobs in response to the worldwide economic recession. The corporation will “make changes that will result in the reduction of our overall
staff by 10,000 positions until the end of FY23 Q3,” according to Microsoft CEO Satya Nadella. During COVID-19, the hiring pace quickened for many tech companies as they need to meet heightened demand. Microsoft currently has 220,000 employees compared to 180,000 employees they had in the previous year, marking a 22% increase. However, starting last quarter of 2022, tech companies started massive layoffs. Amazon was laying off 18,000 workers, while
Salesforce Inc planned to play off 8000 people. Microsoft is the last one to announce. These massive layoffs might be due to many factors, such as high inflation rates and increases in
interest rates, etc.
However, within one week of the layoffs, Microsoft had made a multiyear, multibillion-dollar investment in OpenAI, the maker of ChatGPT. The partnership aims to provide Microsoft customers with the benefits of OpenAI’s AI research. The investment will enable OpenAI to continue to advance its research and development of advanced AI algorithms, while also helping Microsoft integrate OpenAI’s AI capabilities into its products and services, ranging from its design app Microsoft Designer to search app Bing. Although the specifics of the investment,
such as the amount, have not been made public, persons who are familiar with the situation claim that Microsoft had been considering investing up to $10 billion.
This investment is a blatant indication of Microsoft’s interest in AI technology. On a teleconference with analysts last week, Chief Executive Satya Nadella stated that “the age of AI is upon us, and Microsoft is powering it.” To increase its footprint in these markets, the corporation has been engaging in strategic alliances and acquisitions. Apart from OpenAI, Microsoft has been strengthening its position in the cloud computing market through its Azure platform, a platform for building and deploying applications through Microsoft-managed data centers. Microsoft has been bet on the AI industry. For instance, by incorporating ChatGPT with its Bing, some analysts claimed that it enable Microsoft’s Bing to overtake Alphabet Inc.’s Google, which now holds a 90% market share.
The future of artificial intelligence is promising. It is projected to have a substantial influence on a number of businesses and areas, including customer service, healthcare, banking, and transportation, among others. Personally speaking, I believe that the focus on AI products by many major tech giants makes this a great time to invest in AI businesses.
