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Diving overview:
- Microsoft continued hiring AI specialists on Monday as it announced a 2.1% global workforce restructuring that will cut nearly 5,000 jobs. Roughly two-thirds of the job cuts, or 3,200 jobs, will be in the company’s Xbox gaming division, according to a memo shared Monday by Xbox SVP and CEO Asha Sharma.
- The AI-focused Microsoft subsidiary launched last week aims to bring 6,000 industry and engineering experts to customers to help them design, deploy and scale AI systems. The tech giant invested $2.5 billion in the Microsoft Frontier Company effort.
- “AI will not replace roles that are currently obsolete,” Microsoft vice president and chief human resources officer Amy Coleman said in a blog post on Monday. “At the same time… AI is changing the way we work. Some of the tasks we do every day can now be automated, which means we all need to keep learning, keep acquiring new skills, and keep adapting to the evolution of work. Our customers are facing the same changes, and we hope we can help them navigate them.”
Dive Insight:
The race to deliver AI results intensified last week as Microsoft joined in a high-stakes effort to provide implementation expertise to customers. AWS pledged to inject $1 billion into forward engineering in late June, and Google ramped up AI talent hiring in May.
Demand for AI-enabled programmers is soaring, with the unemployment rate for IT professionals dropping below 3% for the first time in June. Finding experienced AI engineering talent is difficult, says Peter Bryant, practice lead for GSI analytics at Omdia, a sister company of Channel Dive.
“Proper FDE is not that common,” Bryant told Channel Dive. “They’re typically in the top 5% of engineering talent in any organization. It’s already a small and expensive talent pool.”
Microsoft has begun recruiting AI talent as it dismantles its gaming division. The company had more than 1,200 AI-related jobs posted on its career site as of noon ET Monday, including more than 60 jobs posted in the past 24 hours. In the AI software engineer category, Microsoft has 870 jobs, 44 of which were posted on Monday.
microsoft Frontier Company will be staffed with a combination of internal talent and external hires, the company told Channel Dive in an email.
While the hiring frenzy depletes the talent pool shared by managed service providers, system integrators, and other channel companies, FDE’s efforts provide an advantage for partners. Google Cloud ramps up its search for AI talent on the heels of committing $750 million to its Partner AI Enablement Program. When Anthropic and OpenAI launched their partner programs this year, the companies committed to providing engineering expertise to their partners.
Microsoft Commercial Business CEO Judson Althoff said in a Frontier Company announcement that Microsoft has existing FDE partnerships with Accenture, Capgemini, EY, KPMG, and PwC. Extending the scope of AI engineering to the partner ecosystem is currently on the agenda, he added.
According to Omdia, the space for AI enablement remains wide open for partners, especially in large mid-markets.
“There is plenty of work to do, but partners who act as implementation strategists for vendor FDEs will be most protected,” Bryant said. “Every Hotshot Engineer needs a Hotshot Problem Solver.”
