Microsoft is urging its employees to deepen their AI expertise, as it slashes thousands of jobs across various departments. According to internal communications reviewed by The Information, the tech giant has already laid off more than 15,000 employees in 2025 through multiple rounds of restructuring.

The latest round of layoffs affected around 9,000 workers, hitting the Xbox division and global sales teams particularly hard. This follows earlier job reductions, including the elimination of 6,000 roles in May and hundreds more in June. These moves are part of a broader shift in Microsoft’s talent strategy as it pivots toward a more AI-driven future.

AI Integration Now Key To Employee Evaluations

As artificial intelligence becomes more embedded in the company’s vision, Microsoft is making AI literacy a requirement rather than a preference. Julia Liuson, president of the Developer Division, has informed managers that AI usage will be factored into performance evaluations. “Using AI is no longer optional — it’s core to every role and every level,” Liuson stressed in internal emails, according to Business Insider. She further advised that AI use should be a part of "holistic reflections on an individual's performance and impact."

The report also noted that the company is considering implementing formal AI usage metrics into employee reviews for the next fiscal year. Teams are exploring benchmarks to measure engagement with AI tools like Microsoft’s Copilot suite.

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Sales Strategy Overhaul Targets Traditional Roles

Microsoft is also recalibrating its sales model. Traditional sales positions are being phased out in favor of more technically skilled “solutions engineers” who can effectively demonstrate AI capabilities to clients. In a memo issued just before the latest round of layoffs, Chief Commercial Officer Judson Althoff outlined an ambitious vision to transform Microsoft into "the Frontier AI Firm" and put "a Copilot on every device and across every role."

Despite investing roughly $80 billion into AI infrastructure in the current fiscal year, Microsoft is tightening operational costs. The company is aligning its workforce and strategies to maintain competitiveness while staking its future on artificial intelligence. The ongoing realignment marks one of the most aggressive pushes by a major tech firm to embed AI into every aspect of its business.