Microsoft Mandates AI Tool Use, Links It to Employee Reviews Amid Fresh Layoff Concerns
According to a report from Business Insider, Microsoft managers have been instructed to factor AI tool usage into performance evaluations. In an internal memo, Julia Liuson, President of the Developer Division, emphasized the non-negotiable nature of AI in the modern workplace. '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.'
Sources familiar with the matter reveal that certain teams are even considering formal metrics to track how employees use AI, especially with concerns around low internal adoption of Microsoft's own AI offerings like Copilot.
Despite substantial internal promotion, tools like Copilot reportedly haven't gained the expected traction, partly due to competition from external platforms such as Cursor. Now, Microsoft is emphasizing hands-on engagement with its AI tools—especially for employees directly involved in developing AI products. While a few secure third-party tools like Replit remain permitted, the focus is clearly shifting to in-house solutions.
This policy shift arrives during a period of continued workforce reduction. After several rounds of layoffs, particularly within the Xbox division, sources suggest another significant wave of job cuts could happen as early as next week. Bloomberg reports indicate that thousands of gaming-related roles may be eliminated as part of an ongoing restructuring plan.
The upcoming layoffs would mark the fourth time since 2023 that Microsoft has reduced headcount within its gaming unit. The division has faced mounting financial scrutiny following the $69 billion acquisition of Activision Blizzard. In June alone, over 300 employees were let go, adding to the more than 6,000 roles already cut in recent months.
With internal adoption of AI tools now a top priority and financial efficiency under the microscope, Microsoft is sending a clear message: adaptability and AI proficiency are no longer optional—they are essential to staying on board.
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