Microsoft to lay off 10,000 employees to cut costs as it doubles down on artificial intelligence

Microsoft announced a jarring pivot this week by firing 10,000 employees and moving resources toward artificial intelligence.

Paige, the only company FDA-approved for a clinical AI application in digital pathology, is one enterprise a touting recent partnership with the tech giant.

AI-powered pathology company Paige announced the partnership last Wednesday, a week before Microsoft CEO Satya Nadella sent an email to employees announcing the layoffs, according to a filing with the U.S. Securities and Exchange Commission. The 47-year-old company is only the latest in a string of tech giants cutting the fat after accelerating hiring during the pandemic to meet to demand for online services and the expansion of cloud computing.

“During the pandemic, there was rapid acceleration. I think we’re going to go through a phase today there’s going to be some amount of normalization of that demand,” Nadella said at the World Economic Forum annual meeting in Davos, Switzerland, yesterday.

“Quite frankly, we in the tech industry will also have to get efficient. It’s not about everyone else doing more with less, we’ll have to do more with less. We’ll have to show our own productivity gains with our own technology," Nadella said.

Restructuring costs including severance will charge the company $1.2 billion, Nadella wrote in an email to employees. Multiple sources have reported that layoffs have begun, including engineering divisions, and could reach up to 5% of Microsoft’s total workforce.

Despite the cost of slimming staff, Microsoft has reportedly been in talks regarding a potential $10 billion investment in ChatGPT owner OpenAI, according to Semafor. If completed, the new funding round with venture firms would boost OpenAI to a $29 billion valuation. 

Paige teams up with Microsoft to enter the brave new world of AI

While the investment in the AI chat feature receiving widespread attention has yet to be acknowledged by Microsoft publicly, the company's publicized partnership with Paige reveals its ongoing interest in how AI can make further inroads in healthcare.

"The application of technology to help clinicians and researchers further enhance patient care and, in many cases, provide life-saving treatment is a core tenet for Microsoft in health and life sciences,” said Tom McGuinness, corporate vice president of global healthcare and life sciences at Microsoft. “We look forward to further collaborating with Paige and giving Microsoft Cloud for Healthcare customers the ability to harness the power and promise of AI in digital pathology.”

Microsoft’s collaboration with Paige involved a strategic investment along with the digital pathology company’s adoption of Microsoft Azure as its cloud provider to house its FullFocus, an FDA-cleared whole-slide image viewer. Paige will also become a Microsoft Cloud for Healthcare partner and allow Microsoft to enhance its own offerings for healthcare customers.

Paige is a digital pathology company also looking to do more with less, specifically fewer pathologists. With a shortage already widespread across the country, Paige CEO Andy Moye, Ph.D., thinks AI-powered pathology can help meet demand.

“It's not that this is a new technology,” Moye told Fierce Healthcare. “It’s that with AI, you now have tools that pathologists are getting really excited about, that really helped them with their workflow, that also helped with the overall economic story.”

Pathologists are getting greater workloads, pathology is costing more, why? Moye says that yes, the population is getting older, but more importantly “the advent of precision medicine is a big part of it.”

How AI-enabled pathology can address the quadruple aim 

If used correctly, digital pathology technology can make the average pathologist 10% to 20% more efficient, Moye said. The change is much needed, considering that the field of pathology has changed from looking under a slide and qualifying cells as cancer or benign to providing oncologists with everything from grading and prognosis to predictive biomarkers, everything needed for precision medicine. The new method has helped lead to cancer deaths dropping by a third since 1991.

"As Paige and others have shown, AI can help practitioners assess the complex nature of human tissue to better understand and then treat disease," a spokesperson for Microsoft wrote in an email to Fierce Healthcare. "Microsoft Research is actively exploring how the intersection of AI and healthcare and life sciences can accelerate innovation for our customers and partners in the pathology AI space and create real-world impact."

Paige currently specializes in breast and prostate cancers. The health tech company focused on the former due to the sheer magnitude of biopsies that pass through even small medical centers and the latter due to its status as a “pathological dilemma.”

Moye points to the “quadruple aim” to prove the payoff of the technology: "It sort of meets all four levels of that,” he said. “It's better for physician quality of life. It's better for a patient outcome. From a cost-effectiveness perspective, you're more efficient, you can do more cases, perhaps you can do the same amount of volume and not have to hire more pathologists.”

Studies have shown that using AI technology in cancer diagnoses can lead to a 70% reduction in diagnostic errors. “That's clearly better for patient outcomes,” Moye said.

Microsoft Research will help Paige further develop large-scale machine-learning models in pathology and oncology. Paige is also working to integrate its offering into Microsoft digital radiology company Nuance’s precision imaging network.

“The future of diagnostics will be like ChatGPT: It's the human with all their expertise, in conjunction with AI. It's not a replacement,” Moye said. “It's to be used as a tool, just like any other laboratory tool to help those pathologists, with all this workflow, with all these new cases that are happening, with all this precision medicine. Hopefully, the technology will be able to help pathologists do their jobs in a better way.”

When it comes to the future of digital pathology, Microsoft sees broad horizons for the technology with potential improvements along the value chain, for example, "the alignment on imaging formats is an important focus area that can further accelerate broad technology adoption in the field." 

As rumors swirl around the tech giant's recent shifts, some are also wondering whether ChatGPT could be integrated into the point of care.

When asked if the company was considering a future for the chat tool in healthcare, a spokesperson for Microsoft responded via email that "Microsoft AI is already helping companies around the world across many industries, including manufacturing, government, retail and healthcare, find innovative ways to solve their most pressing challenges."

"We’ve partnered with OpenAI since 2019 to accelerate breakthroughs in AI and develop, test and responsibly scale the latest AI technologies and we’ll continue to work with OpenAI to explore solutions that harness the power of AI and advanced natural language generation," the spokesperson said.