Microsoft made cuts to its Teams chat app to focus on its Copilot AI tools, leaked memo shows
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- Microsoft made cuts to its Teams chat app to focus on its Copilot AI tools.
- Jared Spataro, Microsoft’s head of AI at Work, detailed the changes in an internal memo.
- “No matter what you do or where you work, your job will be to drive AI transformation,” he wrote.
Microsoft reorganized teams under Jared Spataro, its head of “AI at Work,” shifting focus to its Copilot AI products and reducing the number of employees working on its Teams chat app, according to an excerpt of an internal memo shared with Business Insider.
“In early 2022, we recognized the pandemic as a once-in-a-generation opportunity and we surged on Teams to win,” Spataro wrote. “Now, we’re doing it again.”
The reorganization reduces the number of people working on Teams and creates a new central Copilot and “future of work” team under Colette Stallbaumer, whose LinkedIn profile lists the title of general manager, and consolidates other teams including those working on other various marketing aspects of Copilot. Those reductions included layoffs, a person with direct knowledge of the matter said.
“Going forward, no matter what you do or where you work, your job will be to drive AI transformation,” Spataro wrote.
Microsoft spokesman Frank Shaw confirmed Spataro is putting more resources behind Copilot, but said Teams remains a core priority and Copilot is a part of Teams. Copilot for Teams, Shaw said, is the company’s most used and loved Copilot according to customer surveys and research and will continue to be a focus of future investments. Shaw did not comment on whether the reorg included Teams layoffs.
The change is the latest example of Microsoft prioritizing AI over other areas of the business. Usage of Microsoft’s successful workplace chat tool Teams surged in the pandemic as employees were forced to work remotely, and reached more than 300 million monthly active users in 2023.
While many companies have since returned to offices in some capacity, hybrid work remains an opportunity for tools like Teams. Even Amazon, which introduced a strict return-to-office mandate, is planning to cut costs by reducing office space, as BI recently revealed.
Microsoft is leaning into the potential of its new Copilot tools, built on OpenAI’s GPT models, which so far have mixed feedback from customers. The tools provide automated support, like summarizing meetings or helping to prepare presentations.
Microsoft is internally trying to overcome challenges like unfavorable comparisons to OpenAI’s ChatGPT and add value to the services before customers start doubting the return they’re getting from the steep cost of generative AI technology.
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Axel Springer, Business Insider’s parent company, has a global deal to allow OpenAI to train its models on its media brands’ reporting.
