Amazon (AMZN) CEO Andy Jassy said the company will reduce its workforce in the coming years, and Microsoft (MSFT) is reportedly planning thousands of layoffs, just as the two companies invest billions in AI.

Microsoft is expected to announce the cuts, primarily aimed at its sales teams, early next month, according to Bloomberg, which cited anonymous sources.

Microsoft declined to confirm the cuts to Yahoo Finance. A spokesperson said, “As they typically do year-round, teams evaluate business priorities and ensure they are aligning to the right opportunities for strategic growth.”

The news came a day after Amazon’s Jassy said that AI will lead to job cuts at his own company.

“As we roll out more Generative AI and agents, it should change the way our work is done. We will need fewer people doing some of the jobs that are being done today, and more people doing other types of jobs,” Jassy said in a memo to employees Tuesday. “It’s hard to know exactly where this nets out over time, but in the next few years, we expect that this will reduce our total corporate workforce as we get efficiency gains from using AI extensively across the company.”

The CEO said, because of AI, “We’ll be able to focus less on rote work and more on thinking strategically about how to improve customer experiences and invent new ones.” The comments were met with backlash from employees.

Meanwhile, Amazon and Microsoft have been spending billions to advance their artificial intelligence efforts. Amazon has consistently reported higher capital expenditures than its fellow Big Tech “hyperscalers” over the past several years, driven by its investments in AI infrastructure. In 2025, that trend is set to continue.

Amazon has projected it will spend roughly $105 billion, much higher than its peers, with the vast majority going to AI infrastructure for its cloud segment, Amazon Web Services. Microsoft is set to spend $80 billion in 2025 to build out AI data centers.