Microsoft to Shut Down Skype, Shifting Focus to AI-Powered Teams

Skype Is Finally Shutting Down on May 5

Microsoft today announced that it will officially retire Skype on May 5, 2025, concluding its 14-year tenure as the owner of the once-dominant internet calling and messaging service (via Bloomberg). Microsoft acquired Skype in 2011 for $8.5 billion in what was then its largest-ever acquisition. At its peak, Skype had more than 300 million monthly active users and was synonymous with internet-based voice and video calling. The service steadily declined in relevance in recent years, with its active user base shrinking to approximately 36 million by 2023 as competitors such as Zoom, WhatsApp, and Microsoft's own Teams platform gained traction. Teams has since grown to 320 million monthly users, far surpassing Skype's remaining user base. The company's decision to discontinue Skype is apparently part of a broader effort to prioritize artificial intelligence features within Teams. Employees currently working on Skype will be reassigned to other projects rather than being laid off. Skype played a key role in popularizing VoIP (Voice over Internet Protocol) technology, enabling businesses and individuals to connect around the world with minimal costs. It also served as an early testbed for AI-powered real-time language translation, a feature Microsoft showcased in a widely publicized demonstration in 2014. However, its frequent UI changes, reliability issues, ill-conceived social media-like features, gradual shift toward enterprise, and inability to keep pace with newer competitors, especially during the COVID-19 pandemic, ultimately led to its obsolescence. As Microsoft finalizes the shutdown process, existing Skype users will have until May 5 to migrate their data and contacts to Teams or seek alternative solutions.

Skype is shutting down soon, Microsoft pushing users to Teams - 9to5Mac

It's the end of an era for web calls: Skype is shutting down soon. Microsoft announced it will be retiring the legacy communication platform soon and pushing existing users to adopt Teams instead. Here are the details. Skype is shutting down May 5, leaving users about two months to migrate data over to Teams or find another platform altogether. According to Jeff Teper, Microsoft president overseeing communications and collaboration tools, the need for increased AI investment is a big reason why Skype is being retired. Matt Day writes at Bloomberg: The Windows maker is shuttering Skype to focus on developing new features for Teams, including artificial intelligence tools, Teper said. The company is working to infuse AI into its product suite, while keeping a lid on spending that isn't part of that effort. It's reassigning staff that had worked on Skype to other areas of the business and will not lay anyone off, Teper added. According to Bloomberg, while Skype once had over 300 million monthly users in 2016, that number shrank to around 36 million by 2023 as Microsoft Teams has grown. Skype was one of the major losers of the 2020 COVID era that brought big success to companies like Zoom and Slack. Already at the time Microsoft was investing heavily in Teams, so Skype, despite its past success, was largely left to flounder. Microsoft acquired Skype for $8.5 billion in 2011, which is not that long ago in the grand scheme of things. Per the company, Skype helped set a foundation that was built upon with Teams. So in that sense, its downfall is less a story of failure and more one of preparing the way for the more modern Teams platform to emerge. When was the last time you used Skype? Are you surprised at all by the news? Let us know in the comments.