Source: Above the Law
Talk about how artificial intelligence will someday take lawyers’ jobs has long been dismissed as much ado about nothing — until now.
Microsoft has been conducting layoffs across the company globally since mid-May, and while in-house attorneys are typically safe from such employment woes, the rise of AI may be to blame when it comes to the company’s latest cuts. Microsoft President Brad Smith has given mixed messages about whether artificial intelligence was behind the company’s decision to conduct layoffs, first saying that AI was “not a predominant factor” in the move, and later saying that “success in life … is always about prioritization, and it’s always about investing in the future.”
The Scale of Legal Job Cuts
Microsoft has laid off 15,000 employees across the globe since mid-May. Just in Washington state, the reductions have cost at least 32 company attorneys and five paralegals their jobs, according to state filings.
A layoff notice shows that at least 22 attorneys and five paralegals were among 305 Redmond employees laid off after Microsoft announced 6,000 job cuts on May 13. The second round of layoffs in July displaced 9,000 more workers, with at least 10 additional lawyers cut.
Notably, legal positions were not impacted in earlier layoffs, showing how the restructuring evolved to include previously protected professional services roles. Based on the ratio of legal layoffs to total layoffs at Microsoft’s headquarters (3.1%), the company could potentially be looking at worldwide legal layoffs of about 465 jobs.
The AI Connection
The layoffs come as Microsoft pursues massive AI investments. The company logged an estimated $80 billion in capital investments this fiscal year, creating pressure to reduce operating costs elsewhere.
Industry experts suggest junior attorneys are most at risk. Sean Burke of recruiting firm Whistler Partners said while “there’s no AI that completely replaces the lawyer,” he believes “the lion’s share of laid-off attorneys at Microsoft are in the bottom tranche, lawyers three to seven years out of law school that are more easily replaced, where you can get less lawyers to do more using AI.”
Microsoft CEO Satya Nadella revealed that up to 30% of some Microsoft code is now AI-generated, reflecting broader automation trends that may be reaching legal work.
What This Means
The Microsoft layoffs may represent a watershed moment for the legal profession. While lawyers have long been told that AI would augment rather than replace their work, these cuts suggest that even skilled legal professionals aren’t immune to technological disruption.
The situation creates a stark paradox: Microsoft is simultaneously eliminating thousands of jobs while announcing a $4 billion initiative to help train workers for the AI economy.
Best of luck to all of the in-house counsel at Microsoft who may have lost their jobs in this AI-driven transformation. The legal profession may never be quite the same.
Read more: Above the Law
