AI's Impact on the Workforce: Balancing Efficiency and Human Value

As companies embrace AI, these leaders offer tips to make it better

In 2025, it seems like just about everyone is talking about artificial intelligence and its myriad potential uses. "I have never seen any buzzword so quickly adopted," said Leila Rao, founder of Decatur, Georgia-based organizational change consultancy AgileXtended. Rao helps guide companies through a variety of organizational changes, including navigating AI. Increasingly, Georgia businesses are using AI to simplify and streamline various tasks, such as scheduling, copywriting, directing phone calls and more. In their first survey on the topic, Duluth-based Moneypenny, a phone answering and customer contact service, found that 64% of companies are now either using or considering using AI as of May to "drive efficiency, enhance decision-making and supercharge growth." Additionally, 25% of companies said they are "fully embracing" AI, though that definition was left up to the interpretation of survey respondents. But is AI actually helping workers out as much as advertised? Rao and a top executive from Moneypenny say that the current trend may be falling short of ideal, but improvement is within reach. What's the draw? Forms of AI have been used for years in many workplaces for data analytics, sales and other practices. But generative AI, powerful tools such as ChatGPT that can create original content, sounds, software code and assist in things like scientific research, has thrust AI into mainstream use. One of the unique -- and attractive -- things about AI as a tool is its variability, according to Rao. "With these new tools, there is no standardization because they are, almost by definition, interactive," Rao said. Countless users have also been enticed by the speed of AI -- both the speed with which it can complete tasks and with which new versions and capabilities are developed. This has been reflected in the quickly-developing pervasiveness of AI in business, according to Moneypenny North America CEO Richard Culberson. Outsourcing tedium to machines Some of the top areas where it's being adopted are marketing, content creation and analytics, Moneypenny found. According to Culberson, many of the tasks AI is being used for are under the umbrella of customer interactions. The most cited benefits of embracing AI in business include cost and time savings, productivity efficiencies and better decision-making. "The business is interested, I think, mostly in how AI can fix some of the fundamental friction or drag in organizations," Rao said. Certain complex tasks are typically better left to human workers, or at having their involvement, both Rao and Culberson agreed. But Rao noted that complexity can be deceptive. Scheduling is typically done at a low level of an organization, but can be complex in practice because of many moving parts, she noted. Culberson said he favors methods that rely on human-AI collaboration to complete tasks. He cited copywriting, whether that be a human writing something for the AI to polish or vice versa, as an example of a good hybrid use. Is it actually helping? While many companies are diving into the world of AI and companies are making huge investments in expanding capabilities, the question remains whether these implementations are actually showing benefits or are just something for C-suite executives to flaunt. "Everybody's saying AI can give you more efficiency ... the problem is, that's not translating for the recipient," Rao said. According to Rao, while higher-ups may be excited about their company's AI models, the actual workers on the ground aren't experiencing much growth or otherwise seeing significant benefits from the implementation of these systems. "More often than not, what I am seeing is the people who rave about AI outcomes are not connected to the work itself," Rao said. She isn't hating on AI as a whole though. On the contrary, she loves it -- when it's used to its strengths. "I rely on AI more than I ever thought I would," she said. "But it's not a replacement for my people." The problem is, according to Rao, that many companies are failing to take the people into consideration. "There's not enough shared understanding, between AI and the people who do the work, to make meaning happen," Rao said. Part of the disconnect is emotional, Rao says; the increasing use of and conversation around AI is triggering fear among workers that they'll be replaced or deprioritized. In part, these fears are stoked by miscommunications from higher-ups failing to have a two-way conversation with these workers. Additionally, there tends to be a gap in understanding between what executives and decision-makers think and hear, versus what it's actually like doing the work on the ground, which can lead to misguided assumptions. "Despite their best efforts, leaders tend to talk to other leaders more often than they talk to and listen to their staff," Rao said. Moneypenny found that 50% of companies surveyed say they need better guidance on how to effectively implement AI, something both Rao and Culberson's companies are working to provide. These companies need help understanding how to blend "the empathy and the depth from a human perspective, as well as the technical competencies and efficiency and cost savings you get from AI," Culberson said. Part of the problem is where the AI is actually being implemented within organizations. "Very few people in business are looking across all of their departments and seeing how it can be leveraged in the right way," Culberson said. Addressing key concerns According to Moneypenny's findings, the three biggest concerns around AI are job loss, data security and customer dissatisfaction. To deal with the first problem, Moneypenny promotes a "human-centric" approach. Rao also encourages actually making AI use and development a process involving collaboration across the entire organization. "It has to be an iterative process that feels very much like a conversation," Rao said. She urges companies to have conversations -- and lots of them -- with people who haven't been represented in the rooms where decisions are made. As part of the process, she suggests focusing on training AI as a coach or assistant, rather than a tool to actually complete tasks -- similar to Culberson's hybrid approach. Both agreed that AI should support -- not replace -- workers. "People who will win in the use of AI will start to elevate their own people and not eliminate their people with it," Culberson said. Having "good, productive conversations" and learning with clients are also vital for assuaging customer concerns, according to Culberson. "People want to know they're being taken care of," he said. This is an area that may see a lot of growth and advancement over the next 12-18 months. 2025 The Atlanta Journal-Constitution. Distributed by Tribune Content Agency, LLC.

The new CEO flex: Bragging that AI handles exactly X% of the work

Salesforce CEO Marc Benioff said in a recent interview that AI now does up to 50% of all work at the company, in key functions like engineering, coding, and customer support. In May, Microsoft CEO Satya Nadella said 20% to 30% of the tech giant's code is now written by AI coding assistants. And in April, Google CEO Sundar Pichai said over 30% of code at Google is now generated by AI. It's the latest CEO flex: Citing numbers showing that AI is doing heavy lifting internally. The move presents the company as being ahead of the AI curve -- -and invariably grabs the attention of people who matter. Investors hear the magic words that the business is on track to save money, presumably accomplished, but rarely explicitly stated, through future job cuts. It also signals to the clients of the Big Tech companies making the pronouncements that they should open their wallets, pronto, to incorporate more AI into their operations, or risk falling behind. But how significant these CEO flexes from Salesforce, Google, and Microsoft ultimately are is difficult to know. The metrics cited seem precise, yet when asked, their spokespeople declined to provide any details about how the numbers were calculated or how they defined the work that they claim AI has done. "The truth is, we don't yet have a common framework for measuring what 'percent of work' really means in the age of AI," said Malvika Jethmalani, founder of human capital advisory firm Atvis Group, in a message to Fortune. "Are we counting lines of code, tasks completed, hours saved, or business outcomes influenced?" For example, on the Lex Fridman Podcast, Pichai explained that AI coding tools like Goose increase the productivity of Google's engineers by approximately 10%, calculated by tracking hours saved weekly. However, that number assumes that engineers use those extra hours to work more rather than slack off. The metric that AI tools are responsible for generating 30% of all new software code at Google is equally fuzzy. Does the number refer to raw lines of code that programmers suggest, committed code, or code accepted into production? Benioff was even more vague. In the interview, he described AI's ability to do up to half the work at his company as a "digital labor revolution,", but he didn't clarify what "work" means in this context. For example, he mentioned using AI to co-author Salesforce's corporate plan, but did not detail what that plan was or how much AI contributed. Did it suggest the outline for the plan or did it contribute parts of the text? Were its suggestions retained in the final document? Other experts, however, say comments like those by Benioff are not a flex at all, but simply the reality of AI changing the world of work. Holger Mueller, vice president and principal analyst at Constellation Research, told Fortune that generative AI will massively change the work of the knowledge worker -- though, in his view, without generating mass layoffs. "With developed countries facing a labor and talent shortage, more automation is the biggest promise to deliver long-term competitiveness," he said. But while there may be some truth in CEO statements about how much work is already being done by AI, the numbers are very vague and abstract, said Netherlands-based occupational psychologist Marais Bester. "We often see that CEOs use this type of language," he said. "I think it's also sort of an indicator to employees, saying, you better watch your back, you better perform." From a business psychology standpoint, that's not good leadership, he added. "I was actually a bit disappointed by that comment," he said, referring to Benioff's statement,"because I don't think that we'll ever move towards a space where it will only be AI technologies being utilized as employees within an organization. There will be complementary relationships between human employees and technology." The flex can even cause anxiety among employees who hear it as "we're automating you out," Jethmalani said. "That kind of message can erode trust and undermine adoption at a moment when we need employees to show up highly engaged and willing to experiment and innovate with AI." Shonna Waters, an organizational psychologist and CEO of advisory firm Fractional Insights, also pointed out that while Benioff touts how much Salesforce is using AI -- and how much its clients are adopting that company's AgentForce platform for managing AI agents -- research from firms like Gartner suggests that many of these AI-driven projects are likely to fail by 2027 because their value is unclear. "I do think that really sets the stage for companies to be really thoughtful about how they integrate AI into their organizational design," she said, adding that companies also must deal with the disconnect between what C-suite executives say about AI and what's actually happening on the ground. "These leaders are making these bold claims, and employees are experiencing something pretty different," she said. CEOs, she explained, often have more optimism about AI than employees, while employees have more angst. The companies that will succeed, she said, will be those with "structural empathy" -- that is, building systems that bring in frontline worker voices. "At the end of the day, you need the humans to still be the ones actually adopting the AI you need to bring them along with you journey and figure out how to do it in concert with them, as opposed to something you're doing to them." Bester said CEOs may be using this flex as little more than a boast to competitors. They are saying "just look at us, we are ahead of the curve on this," he said. A better message from Benioff, he said, "would have been about how by utilizing AI and with the human capital strength that we already have, we are able to do so much more than we are already doing in terms of creating efficiencies and better value for our customers." For now, CEOs "obviously want to show their stakeholders that they are on board with AI" and focusing on efficiency, margins, and building value for shareholders," Bester added. "But it could potentially backfire" if organizations don't keep in mind how they are communicating with employees. Or perhaps, if they have to rehire humans down the line if AI proves unable to do so much work. In May, just months after touting AI's ability to replace human workers, Klarna CEO Sebastian Siemiatkowski reversed an AI-driven hiring freeze and announced the company is adding more human staff. He told Bloomberg that Klarna is now hiring to ensure customers always have the option to speak with a real person. "From a brand perspective, a company perspective, I just think it's so critical that you are clear to your customer that there will always be a human if you want," he said.

Fears of an AI workforce takeover may be overblown -- but it's still scrambling firms' hiring plans

Out of 286,679 planned layoffs so far this year, only 20,000 were linked to automation, according to the job and hiring consultancy Challenger, Gray & Christmas.Tilde Oyster / NBC News A growing chorus of executives has put white collar workforces on notice: Their jobs are at risk of being wiped out by artificial intelligence. Yet above that din is a more complicated picture of how AI is currently affecting hiring. Direct evidence of an acceleration in human obsolescence remains scant so far. In a report this week, the job and hiring consultancy Challenger, Gray & Christmas said cuts spurred by President Donald Trump's Department of Government Efficiency remained the leading cause of job losses -- especially for government, nonprofit and other sectors supported by federal funds -- followed by general economic and market conditions. Out of 286,679 planned layoffs so far this year, only 20,000 were linked to automation, the firm said -- with just 75 explicitly tied to AI implementation. "Far less is happening than people imagine," said Andrew Challenger, senior vice president at the consultancy, referring to the impact of AI on the broader workforce in the U.S. "There are roles that can be significantly changed by AI right now, but I'm not talking to too many HR leaders who say AI is replacing jobs." That belies recent comments made by some of America's most prominent executives about the impact that artificial intelligence is expected to have. Last month, Amazon CEO Andy Jassy warned that AI would "reduce our total corporate workforce as we get efficiency gains" over time. However, he did not lay out what that time frame might look like. He also said more people would likely be needed to do "other types of jobs," ones that AI may help generate. And while The Wall Street Journal reported comments from Ford CEO Jim Farley this week that AI would replace "literally half of all white-collar workers in the U.S.," a clip of Farley's presentation offered more context. The automotive executive was speaking about beefing up America's blue-collar workforce, and appeared to be repeating the warning about a white-collar wipeout issued by the CEO of the AI company Anthropic -- a contention that is still being debated. (A representative for Ford did not respond to a request for comment.) Experts say the current era of AI is impacting the job market in more roundabout ways. Many firms are currently under tremendous pressure to cut costs given the generally uncertain economic environment spurred by the heavy cost of Trump's tariff policy and worries about rising inflation. As a result, some companies are diverting spending that would otherwise be going to hiring more employees and shifting it toward AI software. "There's basically a blank check to go out and buy these AI tools," said Josh Bersin, CEO of The Josh Bersin Company workforce consultancy. "Then they go out and say, as far as head count: No more hiring. Just, 'stop.' So that immediately freezes the job market." Among the most high-profile examples is Shopify, whose CEO told employees they must now prove why they "cannot get what they want done using AI" before asking for more employees and resources. "What would this area look like if autonomous AI agents were already part of the team?" Shopify CEO Tobi Lutke wrote in a memo sent to employees in March. "This question can lead to really fun discussions and projects." The chief executive of language learning app Duolingo, Luis von Ahn, issued a similar edict in May, writing that the firm would gradually stop using contractors to do work that AI can handle and that a budget for new employees would only be given "if a team cannot automate more of their work." Enough firms hedging in this way, alongside a wider economic slowdown, may indeed be suppressing overall hiring, especially in business and professional services. But those trends do not amount to large-scale replacement of existing workers by AI agents. Then there are the firms creating the AI tools themselves -- the ones other businesses are ostensibly looking to purchase and deploy to automate their workforces. These AI developers, including Dell, Google parent Alphabet, Facebook parent Meta, Microsoft and Salesforce, have been shedding workers not tied to AI product development and shifting resources toward those who are. If AI is causing job losses, it's not because it's doing someone else's job. It's because budgets -- and demands on the bottom line -- are changing. The state of hiring at Microsoft is illustrative. Over the past several weeks, the tech giant -- whose stock has surged 17% year to date thanks in part to the popularity of its Copilot AI tool -- has announced job cuts affecting some 15,000 roles, or about 7% of its workforce. In this case, some human replacement does appear to be occurring: CEO Satya Nadella said recently that as much as 30% of the company's code is now written by AI -- something Bloomberg News confirmed in a report showing software engineering roles made up more than 40% of the roughly 2,000 positions cut in one of the recent layoff rounds. Yet other analysts indicated the cuts were also likely designed to offset the costs associated with Microsoft's massive buildout of data centers designed to handle AI computer processing. "We believe that every year Microsoft invests at the current levels, it would need to reduce headcount by at least 10,000" in order to make up for its increased capital expenditures, said Gil Luria, a tech research analyst at D.A. Davidson financial group, in an interview with Reuters. In a note to clients, analysts with the consultancy Capital Economics said not all mentions of AI by businesses discussing their financial picture should be taken at face value. "For some firms, AI is a way to spin job losses driven by poor financial performance in a more positive light," they wrote. AI is also impacting the hiring and recruiting process itself. A galaxy of startups now offers tools that can perform the job of entire HR departments, from scanning resumes to interviewing candidates. At IBM, "a couple hundred" HR workers have been recently replaced by AI agents, CEO Arvind Krishna told The Wall Street Journal in May. Yet with those efficiencies, the company was able to hire more programmers and salespeople, he said. "While we have done a huge amount of work inside IBM on leveraging AI and automation on certain enterprise workflows, our total employment has actually gone up, because what it does is it gives you more investment to put into other areas," Krishna said. For anyone struggling to find new work, AI is not without blame. But experts say economic factors continue to vastly outweigh the threat from automation. "Our research has shown that AI will fundamentally change a whole lot of jobs, some by a lot," said Svenja Gudell, chief economist at Indeed Hiring Lab. In the case of software developers especially, she said, roles are being completely transformed. "But does it still mean AI took that job? I don't think so," she said. "There's not evidence that it's fully replacing whole workers, or that the current slowdown can be attributed to it."

Microsoft layoffs a reminder -- WA's job market can melt down

With Microsoft's latest layoffs Wednesday, the quickening contraction of Seattle-area tech is starting to feel like previous industry meltdowns, when mounting job losses signaled deep disruptions in the regional economy. Since May, Microsoft has announced around 15,000 layoffs, including 4,000 in Washington, as the Redmond-based company continues to disrupt its own operations with the powerful artificial intelligence technology it is pitching to customers. Taken alone, those cuts pale next to the massive layoffs during previous industry downturns -- the construction industry crash in the Great Recession of 2008-2009, for example, or the tech layoffs in the dot-com bust in 2000, or, certainly, the Boeing Bust during 1969-1971, when 60,000-plus aerospace workers lost their jobs. But Microsoft's recent cuts are more significant when seen as part of a broader pullback as Big Tech, long known for rapid growth and generous salaries, scrambles to reinvent its labor model, experts say. Maybe the Seattle-area won't see a return of billboards asking the last person leaving to "turn out the lights," as happened in the Boeing Bust, says University of Washington labor economist Yael Midnight. But Midnight adds, if AI delivers its much-promised efficiencies to Big Tech, the era of "that kind of money coming into the community seems to be nearing its end." How deeply AI disrupts Big Tech as a local job creator remains to be seen. But employment in the sector has already shrunk by around 12% since its it peak in mid-2023, according to state data. And more cuts seem inevitable as powerful new technologies upend Big Tech much as its own products disrupted other sectors in the past. "The chickens are coming home to roost for the tech sector," said Jacob Vigdor, an economist with the University of Washington Evans School of Public Policy who follows state and local job markets. Experts like Vigdor and Midnight are quick to emphasize important differences between Big Tech's current contraction and the previous sector collapses. The Boeing Bust, for example, followed what was arguably a once-in-a-century perfect storm of economic bad news. That included higher-than-expected development costs for the 747, falling aircraft sales after nearly a decadelong boom and the cancellation of federal funding for Boeing's supersonic aircraft. The combination pushed Boeing to the brink of bankruptcy and forced the company to cut around 60% of its workforce. The dot-com bubble of the 1990s, meanwhile, was fueled in part by overeager investors propping up tech startups long on hype but short on actual products. While some dot-com startups, notably Amazon, had solid prospects, many others stayed afloat only because investors were "willing to throw lots of cash at them," Vigdor said. Those firms "were doomed as soon as the animal spirits of the market started to turn against them," Vigdor said. The resulting bust forced even Amazon to cut to the bone -- including around 1,300 workers, or 15% of its staff, in early 2021 -- to survive. On the surface, tech's situation today is light-years from what confronted either Boeing or the dot-com players, Vigdor said. Unlike those earlier crashes, Big Tech is still booming, with lots of business, deep pockets and huge profits. Even so, Big Tech has faced its own perfect storm in recent years. High interest rates have hampered internal investment. The government has imposed hiring restrictions for the foreign tech workers that have been so key to Big Tech's recent growth. More broadly, starting around 2022, many tech firms began to correct what came to be seen as excessive hiring. Until then, many companies prioritized continued expansion into new products, services and markets. As a result, they also prioritized aggressive hiring -- and generous compensation -- to handle the expected workload, said Evan Seguirant, a veteran tech recruiter and founder of Voyager Talent, a Seattle-area firm. The industry's hiring philosophy, Seguirant said, was, "we're growing. We're adding new features, we're adding new functionality, and the job market is booming." By 2022 or so, however, many tech firms realized the hot job market "was pretty much unsustainably hot," and were pulling back on hiring, Seguirant said. Taken together, these factors effectively paused hiring in a sector that for years seemed perpetually starved for talent. Between January 2015 and August 2022, employment in the "information" job category, which includes most tech sector jobs, grew 57%, or around 7.5% a year, to 175,000 in Washington, according to the state Employment Security Department. That's more than three times the growth rate for total state employment. Since fall 2022, however, information sector employment has fallen nearly 6%, or roughly 2% a year, to 165,200, according to state data through May. That compares to a 10% employment drop the aftermath of the 2000-2001 dot-com bust. Although a lot of that recent correction was likely without AI, some experts say, the technology has added a massive new twist to the tech job market. Companies like Microsoft have made huge investments in AI, which has left them with less to spend on hiring. As important, many tech firms face huge pressure to use that AI technology to transform their own internal operations and labor models. Where earlier waves of automation upended blue collar sectors, such as manufacturing, AI is now "affecting jobs that historically were safe from automation," said Anneliese Vance-Sherman, chief labor economist at the state Employment Security Department. And because many of those "historically safe" jobs are in the tech sector itself, companies now are in the awkward position of needing to demonstrate their new tools on their own operations. "If you're preaching about the efficiency of AI, and you're making so many investments in AI, why would you ... continue to hire, hire, hire and grow into a massive, bloated company?" said Voyager's Seguirant. "That, as a general, permeating mindset, leads to much different ways in which these companies act, including in how they hire," he added. What this new mindset actually means in terms of actual job growth going forward is a complicated question. With the industry's hiring correction largely completed, one big unknown is how quickly AI will not only replace current jobs but also create new ones. Although Microsoft itself insists it isn't using AI to replace programmers and other workers, other firms have been more explicit about the impacts on hiring. In June, Amazon CEO Andy Jassy told employees the company's growing internal use of AI could lower the number of corporate employees over the next few years. One likely scenario, some experts say, is several years of smaller layoffs, as tech companies figure out how to deploy the new technology and discover new uses. Hiring growth could resume after that, albeit at a rate well below that of the past two decades. That's likely to mean a lot of anxiety for current tech employees, and frustration for the tens of thousands of students who poured into computer science programs in the hopes of six figure salaries and stock options, It's also certain to mean changes for a region long accustomed to the steady influx of well-paid workers. A decade ago, that influx was so powerful that it helped pull the Seattle-area out of the Great Recession, when the more traditional job creator, the construction sector, was still flat on its back, said Vance-Sherman, with the state Employment Security Department. In the years since, that influx has fueled a huge jump in regional wealth for both private companies but also governments, which have gained in tax revenue on construction and real estate sales. With AI, however, a very different scenario emerges -- one in which the tech sectors remains highly profitable, but the region sees less growth in spending and taxes. If AI is a success, a slower growing tech sector could "continue to innovate and bring new products and services to market and rake in profits far as the eye can see," Vigdor said. But for all the businesses that have grown to depend on a faster growing tech sector, this new, more efficient hiring model could prove costly. And a public sector long accustomed to tech-fuel tax growth is "going to be dealing with catastrophe," Vigdor said.

Behind Microsoft's layoffs: A new attitude shaped by AI

Microsoft's layoff waves -- the latest arrived Wednesday -- are leading some employees to ask themselves two questions: Am I next? Will there be another job out there for me? The Redmond-based tech giant laid off more than 6,000 employees in May, followed up by an additional 305 in early June. The company kicked off its fiscal year in early July by eliminating 9,000 more workers. Explanations as to why the world's most valuable company is shedding workers at a pace rarely seen in its history have been vague and, for the employees who might be next, unpersuasive. The company says it wants to flatten management layers and trim redundant roles. But employees are seeing those around them plucked away without much explanation. Like other companies during the pandemic, Microsoft swelled. The company's head count reached a record 228,000 people worldwide in 2024, a year after sweeping layoffs across the industry. Tech experts and analysts say it may be prudent to take the company at its word, that the sheer size of the workforce isn't as necessary as it was a few years ago. Before AI, some of Microsoft's biggest investments were in payroll. But now it needs to build data centers and buy expensive hardware from companies like Nvidia. "What we have seen in the past 15 years is the supersizing of the tech sector, and certain companies like Microsoft have been at the forefront," said Margaret O'Mara, a historian at the University of Washington who writes about tech. "Everything got bigger and faster because there was so much money being made. That money can now be deployed differently. The bottom line is, how many people do these companies really need?" For company veterans recently cut loose, Microsoft's apparent return to a culture of looming layoffs and poor communication has stopped what they saw as a positive evolution. "I'm a Microsoft advocate, but it's really hard and sad to see Microsoft turn its back on what was a kinder and nicer work environment," said Kelly Bowen-McCombs, a 25-year Microsoft veteran who was laid off in 2024. Microsoft didn't tie the layoffs to performance issues or target specific sorts of roles. The company said it needs nimble, agile teams to run the artificial intelligence race and is cutting costs to invest billions in AI. Microsoft is tossing those thousands of employees, 3,120 in Washington so far this year, into a crowded, decidedly chilly labor pool. For the first time in decades, it's not a given that an employer will chase an unemployed tech worker for a job. Tech's labor market has been tight before. In late 2022 through the first half of 2023, Microsoft, Amazon, Google and Meta laid off tens of thousands as a counterbalance to pandemic overhiring. But hiring picked back up quickly and tech's job growth stayed relatively flat with a few spikes. Paul Turek, an economist for the Washington state Employment Security Department, said that might not be the case this year. "It's pretty tough to find another tech company that will hire you at this point in time," Turek said. Tech sector hiring, he continued, could tip into the negative by winter. Bold new AI frontier As former Microsoft employees searching for work feel the squeeze, some who survived the layoffs feel a shift in the company's culture in the wake of the launch of ChatGPT, an AI-powered chatbot from Microsoft-backed OpenAI, in late 2022. Microsoft pushed all of its chips into the technology. The company soon incorporated its AI assistant Copilot into the suite of Office products and offered AI tools for employees. Microsoft sees AI as a technology that brings as fundamental a shift to society as electricity. The company also forecasts a change within, as AI skills become as valuable as coding skills were a decade ago. The era of Microsoft as the gentle tech giant may be ending as well. Once known as the bully in the room, Microsoft under CEO Satya Nadella fostered a reputation of an innovative but compassionate tech company. Microsoft avoided much of the scrutiny companies like Meta and Amazon face for their cultures. The AI race raises the stakes for Microsoft. The company met the cloud computing revolution unprepared and has no desire to be caught flat-footed again. So far this year, the company has pumped $80 billion into AI infrastructure investments. That's enough to cover the city of Seattle's budget over the past 13 years. With money flowing out and a fuzzy timetable for return on investment, Microsoft is cutting costs. And the employees who joined Microsoft for the culture may be at risk. Job searching A data scientist who's been working for Microsoft for several years said she turned down a competing offer worth twice her current compensation to work for Microsoft, in part to avoid the other company's intense culture. She asked not to be named to protect her job. "I decided to work here, and I really like my job," she said. "The problems are challenging but interesting." At Microsoft, she said, there's been a balance between innovation and speed. Deadlines were assigned that fit the work required. But in the past year or so, she's noticed a shift. Teams in her division were working backward from a deadline. Demands for speed intensified. She also noticed a more watchful eye from higher-ups, with more metrics put on her team than before. She said there's pressure to use AI tools, and that the company measures the use of Copilot in Microsoft's code repository, GitHub. Microsoft leadership is bullish on internal AI use, with claims that as much as 30% of the company's code is written by AI tools. The developer-focused Build conference Microsoft held in May was devoted to "agentic" AI, technology that goes beyond generating content from specific prompts and instead acts on a user's behalf. The company recently introduced an AI question to its biannual employee-sentiment survey. About a year ago Microsoft first asked employees whether they feel they're learning ways to apply AI to their work. For one cloud organization, the score for that question was one of the lowest last year, according to memos seen by The Seattle Times. Douglas Phillips, a corporate vice president for an Azure organization, said in a December memo to employees they would "look for additional opportunities to ... use AI in their work." Like most of her colleagues, the data scientist is also being tracked on her number of days in the office. There's no threat or implication of enforcement if in-office time or Copilot usage metrics aren't met. Coupled with the layoffs, though, the increasing surveillance can fuel fears. If the company is collecting data, you don't want to leave anything that might raise eyebrows, she said. "We don't know the factors for how they're getting rid of people," she said. "I'm not the only one job searching right now, but it's a very intense job market." Structural change The labor market as a whole is tightening, in strange ways. While unemployment rates are relatively low and payroll growth remains steady, the economic outlook is uncertain. Tech has been historically immune to unfriendly labor markets and economic downturns. Like health care, tech has been able to produce job growth in some of the toughest times. But major technological advances have altered the makeup of tech workforces before. The internet's proliferation in the 1990s created a boom/bust cycle that spawned a challenging labor market, like one tech workers could face soon. Turek, the economist with Washington state, said the internet caused structural change in the job market. People who had worked in tech since it was a fledgling industry lost their jobs, but then new ones were created to meet a new age. "The question we have now is, what does that path look like? Are we going to see more people lose jobs than gaining jobs?" Turek said. Microsoft emphasizes upskilling for AI. The company's push to tack Copilot onto almost every product stems from a corporate philosophy that everything be done with help from a robot. Microsoft hasn't tied the advances of AI to job losses, though some of its tech peers have. Sales software platform Salesforce recently said that it's hired fewer engineers and customer service reps due to AI adoption. Amazon CEO Andy Jassy told employees he expects the e-commerce giant's corporate head count to fall as AI makes its way into every corner of the company. As Microsoft pumps money and employee hours into AI development, roles and even whole teams could be cut. For employees, that creeping feeling that they could be next is bringing a familiar sentiment from a much more competitive time in Microsoft's history. Old Microsoft Bowen-McCombs worked at Microsoft for just shy of 25 years. Then she talked herself out of a job, as she tells it. She was a principal product manager for the Microsoft 365 Developer Program, a platform that allowed outside developers to build off Microsoft products. She argued for more resources for her team for about a year, but it was hard to get investment that wasn't directly connected to AI after Copilot launched in 2023. In January 2024, the company agreed as it moved her program to India to cut costs. "I managed to get new positions for my team," Bowen-McCombs said. "They did not find a place for me." She was told in June 2024 she'd be let go. Less than a year later, her husband, another veteran Microsoft worker, was also among the thousands of Washington employees laid off. His login access was cut off the morning he received a termination notice. "I am beyond disappointed in how Microsoft has been handling this," Bowen-McCombs said. "I know they're pivoting to AI, but it doesn't feel like the culture Satya had been trying to foster." She recalled her brief time under founder Bill Gates and her years under CEO Steve Ballmer, who took over in 2000 before giving up the top job to Nadella in 2014. Microsoft was cutthroat then, she said, always wondering who you threw off the bus first. But Nadella felt like a breath of fresh air. He celebrated diversity and inclusion and tried to foster people's careers. In her last couple of years, she felt a shift though, a slow ratcheting back to "Old Microsoft." "From a business perspective, I understand the need to reorient, to contract," Bowen-McCombs said. "I just don't think they're being very honest about it. I don't know what the right way to get laid off is, but I'm appalled that people were laid off by conference calls or notified by losing access. It's just so impersonal." After the layoffs in May, some employees said they had been blindsided. Rumors swirled in the days leading up to it, and managers had few answers themselves. Some showed up to work and soon received an invitation to a meeting where they were terminated along with dozens of others in their division, on anonymous conference calls. A product designer, who's been with Microsoft for almost 13 years, echoed Bowen-McCombs' sentiments. She said she remembers a pre-Nadella era. The paranoia, fear and backstabbing from fellow team members. "It's not a pleasant place to be right now; everyone's sharpening their knives," said the designer, who asked not to be named to protect her job. "I can't lose my job right now, especially not in this job market." She also felt a tonal switch happen right after the May wave of layoffs. A week after Microsoft cut more than 6,000 people, it held its massive Build conference in Seattle. Nadella aired a recorded video conversation between himself and Tesla CEO Elon Musk to discuss the latter's AI models being developed on Microsoft's platforms. "A week after these layoffs, Satya chooses to have Elon Musk, the man who orchestrated the mass layoffs in the federal government, onstage," the product designer said. "What message are we supposed to take from that?"