Microsoft laid off 4800 employees, with Xbox and commercial sales being the hardest hit. The company says the layoffs are due to changing business needs and not directly because of AI replacing jobs, but rather AI changing how work gets done. This move comes as Microsoft invests heavily in AI, with a $2.5 billion investment in its Frontier Company business unit. The layoffs are part of a larger restructuring effort to position the company for long-term success. Why it matters: the correlation between job cuts and increased AI spending highlights the significant impact of AI on the workforce and the need for workers to adapt to new technologies.