Why is Microsoft axing jobs again after creating an AI hub last year? 

In April last year, I explored the creation of Microsoft’s new AI hub in London and what this could mean for UK tech jobs. The announcement arrived at a time when sector-wide job layoffs were in full flow – Microsoft itself had already enacted a wave of job cuts – but the hub was a chance to hire the pinnacle of AI talent and bolster AI skills and jobs. 

Now, news has broken that the tech giant plans to cut a further 9,000 jobs worldwide as it hands over more tasks to AI. It marks the third wave of redundancies smashing into Microsoft’s shores this year. (It cut 6,000 roles in May and a further 2,000 in January for “performance-related” reasons.) 

This current wave of redundancies is spread out across its 228,000-strong global workforce. Yet does this mark a wholesale shift in what UK tech jobs are available on the market? Does it even represent less jobs being available altogether? 

Creating AI jobs to replace jobs? 

In a blog announcing the AI hub, Microsoft’s AI boss Mustafa Suleyman described their ambition to hire “the best AI scientists and engineers”. The announcement complemented its additional “£2.5bn investment to upskill the UK workforce for the AI era”. Yet do these cuts contradict its plans to recruit and upskill talent?

It’s worth noting that many of these new layoffs are to its gaming divisions. But there’s no doubt they’re being propelled by huge investment into and prioritisation of AI, a trend that tech giants are all driving forward, alongside AI’s ongoing internal integration to trim the workforce. Last month, Amazon boss Andrew Jassy got in touch with white collar employees to inform them their jobs were at risk to AI and that its use would reduce the company’s “total corporate workforce” over “the next few years”. 

So, while it might still be the case that the AI hub is seeking the ‘pinnacle’ of AI talent, this pinnacle will also be replacing a broader base of employees beneath it. Again, there are question marks over trimming rather than upskilling talent – and the core question left lingering amongst all of this is what happens to this laid-off workforce? 

AI jobs’ teething issues 

On the flip side, as I mentioned last year, “the layoffs could also create a pool of top tier talent for smaller companies to take advantage of”. This could be a moment for tech startups and scaleups and talent incubators to create new job openings and offer exciting opportunities for talent to spearhead tech development elsewhere. But there’s no doubt that market dynamics and investment impact the talent ecosystem across the board – and these companies will be using AI themselves to enhance efficiency.

These job conundrums persist in the sector more broadly. When it comes to AI integration and tech jobs, how entry-level employees develop skills and how the reskilling of existing employees takes place are key teething issues. And while we had maybe anticipated seeing more clarity and governance around AI adoption by now, its use still feels very experimental, as companies work out how best to add value, what tasks it should be used for, and what skills employees need to effectively use it. 

A tech talent ecosystem in flux

Over a year on from the creation of Microsoft’s AI Hub, the latest layoffs illustrate how the position of tech jobs – and, indeed, jobs on the whole – remains in a high state of flux. What’s interesting is that there are also stories of people and agencies being hired to remedy AI-generated content and code. Human oversight is an increasingly sought-after commodity. 

Yet a paradox arises in the notion that in order to adequately oversee AI models, you have to understand the work and have the skills they are replacing. This is resetting the bar for the level of skills entry-level grads are required to have, something we are actively seeing in the hiring process, or the training provided by companies to their employees to ensure they maintain core skills while upskilling to new ones. 

So while AI is allowing companies to (on the face of it) do more for less and trim costs, it seems other opportunities are opening up for work – and there will be a great demand for the skills AI is taking over.

We’ll be watching how the AI job scene plays out closely. If you are interested in joining our team and playing an active part in the tech sector, feel free to get in touch via our contact page.