Microsoft Employees Told To Embrace AI Or Risk Poor Reviews: Will This Impact July Layoffs?
Microsoft managers have reportedly been instructed to assess employees’ AI usage alongside other key competencies.
Microsoft has made its stance crystal clear: Artificial Intelligence is no longer a helpful tool—it's a job requirement. According to a report by Business Insider, the tech giant has begun linking employees’ performance evaluations to how effectively they adopt and use its internal AI tools. This directive reflects Microsoft’s growing frustration with the slow uptake of its AI services, especially the much-touted Copilot system.
In an internal email, Julia Liuson, President of Microsoft’s Developer Division, didn’t mince words about the new direction. “AI is now a fundamental part of how we work,” she 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.”
Managers have reportedly been instructed to assess employees’ AI usage alongside other key competencies, and some teams are even considering formal metrics tied to AI adoption for upcoming reviews. The company’s move is seen as a way to not just boost internal AI usage but also set an example for its customer base.
Pressure Mounts As Copilot Struggles Internally
Despite heavy external marketing, Microsoft’s own workforce hasn’t embraced Copilot as enthusiastically as hoped. The tepid response is particularly concerning given the rise of competing AI tools like Cursor, which are gaining popularity among developers.
While Microsoft is pushing for internal adoption of its own AI offerings, it has shown some flexibility by allowing secure external tools like Replit in specific scenarios. But for teams building Microsoft’s AI products, the expectation is clear: know the tools, use the tools, and demonstrate impact.
The AI push is part of a broader cultural shift inside Microsoft, where integration of new technologies is now treated as essential to daily operations, not an optional experiment.
July Job Cuts Expected to Hit Xbox Hard
This internal AI mandate also arrives amid heightened anxiety over more job losses. Microsoft is reportedly planning another significant round of layoffs in July 2025. Citing sources familiar with the matter, Bloomberg reports that thousands of jobs in the Xbox division are on the chopping block, potentially as early as next week. This would mark the fourth major workforce reduction affecting Xbox since 2023.
The cuts follow a series of closures involving game studios and a company-wide effort to improve financial performance in the wake of its $69 billion acquisition of Activision Blizzard. Microsoft’s gaming division has been under increasing pressure to show profitability, with internal teams reportedly describing the latest round of layoffs as "considerable."
June alone saw over 300 employees let go, bringing the total number of layoffs in recent months to more than 6,300.
As Microsoft reshapes its future around AI and cost-efficiency, employees now face dual pressures: embrace the company’s AI tools wholeheartedly, or risk being left behind, both in performance evaluations and job security.
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