What may seem like just another AI product reflects a fundamental and possibly profitable transformation in the company's revenue model. Despite being a key player in the AI arena, Microsoft (MSFT) shares have remained surprisingly grounded.

Microsoft is cutting about 2.1% of its workforce, or roughly 4,800 jobs, the latest in a wave of tech layoffs as the Windows maker spends heavily on AI infrastructure and ​uses the technology to improve efficiency across its business.

It comes after Microsoft's CEO of AI, Mustafa Suleyman, said at Build that the plan is to 'reduce and ultimately eliminate' spend on external AI models.

Microsoft’s latest layoffs coincide with rising H‑1B filings, intensifying scrutiny of its AI‑driven workforce shift.

Independent tracking and enterprise analyses show modest Microsoft 365 Copilot uptake despite broad purchasing, a pattern with budget implications. Reports from AI Business Weekly and Redress Compliance put Microsoft 365 Copilot adoption at about 4.

Declaring that Microsoft’s gaming arm is “not healthy”, she announced that 3,200 employees would be axed over the next 12 months, and that up to five loss-making studios would be shed. Her diagnosis makes two things clear: first,

A recently uncovered Project Aion video shows Microsoft's vision for an AI-powered Windows experience, but don't expect your PC to lose the Start menu or traditional apps anytime soon.

Microsoft announced layoffs affecting 4,800 employees, offering severance packages up to 39 weeks' pay. Compensation varies by employee level, with options for continued stock vesting and health insurance.