Microsoft's New Initiative Mandates AI Tool Usage For All Employees Amid Upcoming Layoffs

Microsoft is reportedly making the use of its artificial intelligence tools mandatory for employees. This initiative is part of a broader strategy to integrate AI into daily operations and evaluate employee performance based on their engagement with these tools. The company aims to address low adoption rates of its AI services, especially in light of upcoming layoffs expected in July 2025.

According to Business Insider, Microsoft has instructed managers to consider AI tool usage when assessing employee performance. Julia Liuson, president of the Developer Division, emphasized in an internal email that AI is now essential to every role within the company. "AI is now a fundamental part of how we work," Liuson wrote. "Just like collaboration, data-driven thinking, and effective communication, using AI is no longer optional — it's core to every role and every level."

AI Integration in Employee Evaluations

Managers are reportedly being asked to incorporate AI usage into their evaluations of employees. Some teams are considering formal metrics related to AI use for future performance reviews. This move aligns with Microsoft's goal to enhance internal adoption of its AI tools. Despite significant promotion efforts, the company's Copilot tool hasn't achieved expected adoption levels due to competition from other AI coding assistants like Cursor.

The push for increased AI tool usage comes amid ongoing job cuts at Microsoft. The company has already conducted several rounds of layoffs affecting thousands within its Xbox division and gaming operations. Another wave of layoffs is anticipated in July 2025 as part of a larger restructuring effort.

Impact on Gaming Division

Internal sources describe the impending job cuts as significant, particularly within Microsoft's gaming sector, which faces financial scrutiny. The expected layoffs follow the closure of multiple game studios and increased pressure to boost profitability in gaming operations. Since acquiring Activision Blizzard for $69 billion in 2023, Microsoft has focused on streamlining its gaming business.

In June alone, Microsoft laid off over 300 employees, adding to more than 6,000 positions eliminated in previous months. Overall, recent reductions have resulted in over 6,300 employees being let go.