Microsoft Corp. told employees this week that artificial-intelligence tools trimmed more than $500 million from operating costs last year, largely by automating tasks in its call-center operations, according to people familiar with a presentation by Chief Commercial Officer Judson Althoff. Althoff said AI systems now generate 35% of the code for new products and are boosting productivity in sales, customer service and software engineering. The company’s GitHub Copilot programming assistant has reached about 15 million users, he added, while early use of AI for smaller customer accounts is already bringing in tens of millions of dollars in revenue. The efficiency gains come as Microsoft continues a series of workforce reductions. The software maker eliminated about 9,000 positions last week, bringing total cuts this year to roughly 15,000—close to 4% of its global staff. Executives said productivity improvements were not the primary driver of the layoffs. Microsoft is simultaneously expanding its spending on AI infrastructure, setting aside about $80 billion for data-center capacity in fiscal 2025. The company reported $26 billion in profit on $70 billion of revenue last quarter and has indicated it will channel much of its cash flow into further AI development.