Microsoft Is Cutting Engineers and Leaning on AI. That Is a Buy Signal for ERP Talent.
LinkedIn just cut 606 people in California. Most were Bay Area engineers. The reason given? Microsoft is building leaner teams that lean harder on AI.
The platform every recruiter and hiring manager opens ten times a day is actually shrinking its own engineering organization because the parent company believes AI can carry more of the load.
But, your 1st thought most likely is not the correct one. The easy takeaway is that AI is coming for technical jobs, that headcount is falling across the board, and that anyone whose work touches software should be nervous. That seams to be a pretty easy narrative for folks to understand and fear.
Here is what the headline is what, in reality, I believe is going to come to pass instead.
The work does not go away, it just changes direction and form
When Microsoft trims engineering and points to AI as the reason, the work tied to those roles does not disappear. It shifts. And in the Dynamics 365 and NetSuite world, it shifts toward people, not away from them.
AI is genuinely good at writing code now. That is not in dispute. But code was never the bottleneck in an ERP implementation. The bottleneck is the business logic underneath it.
AI cannot sit with a controller and figure out why the month-end close breaks every quarter. It cannot map a broken order-to-cash process onto a system that three departments will actually use. It cannot own a D365 Dual-write integration when finance and operations disagree on which system holds the source of truth. It cannot read the room in a steering committee meeting and tell you the project is about to stall for internal political reasons, not technical ones.
That work is functional that takes a human thinking and logic and intuition in combination. And I really believe we will soon see demand for it to be climbing, not falling, as more companies bet on AI and then discover the hard part wasn’t the code, but the business processes that is the foundation of ERP systems and the need for the people with the experience and knowledge to maximize it’s effectiveness for the company good.
Two markets that look like one
This is where smart hiring teams get confused. They see “tech layoffs” and “AI efficiency” in the same sentence and assume the whole talent market is crashing and it really is not at all.
There are actually two markets here, and they are moving in opposite directions.
The first is platform engineering at the hyperscalers. Microsoft, and companies like it, can absorb AI tooling into large engineering orgs and run leaner. That market is contracting. Thoser layoffs are large scale and very real.
The second is the implementation and operations layer that sits on top of those platforms. The functional consultants, solution architects, integration leads, and ERP-fluent operators who make a system fit a business. That market is tightening. There are not enough of these people, the good ones are not on the market for long, and AI adoption is increasing the pressure rather than relieving it. Yes, there has been some RIF’s taking place with this group as well over the last couple of years, but I am sensing things are starting to pick up a bit now in Partner channel and I’ve been sending out alot more Congratulations messages lately on Linked In so I know improving.
Confusing the first market for the second will soon be an expensive mistake as things shift back to a candidate driven market and every Partner and end costumers in every industry begin scrambling once again for senior level MS Dynamics and NetSuite talent that understand how to leverage the information that AI delivers for them.
What this means if you are hiring
If you run a PE-backed portfolio company, the message is straightforward. A value-creation thesis that depends on a clean ERP migration or a finance transformation lives or dies on the functional lead you put on it. That role will soon be much hard to fill, not easier. Budget for it accordingly, and start the search before the project does.
If you run a Dynamics or NetSuite practice, you already feel this. Your constraint is rarely demand. It is the bench. Every senior functional consultant you cannot hire is a project you cannot staff and revenue you cannot recognize. The firms winning the next two years are the ones building that bench now, while everyone else is still reading the layoff headlines and feeling relaxed.
If you are an enterprise hiring manager, the lesson is to separate the signal from the noise. The noise is “tech is shedding jobs.” The signal is that the specific people who can make your AI ambitions real, by getting the underlying systems right, are scarcer and more valuable than they were.
The bottom line
Leaner engineering headcount at a tech giant is not a softer talent market for ERP implementation. They are different markets with different dynamics. One is contracting. The other is tightening.
Bryan Ray is the Founder and Managing Partner of DynamicsFocus, LLC, a boutique executive search firm focused exclusively on Microsoft Dynamics 365 and NetSuite talent across North America and Europe. Reach him at bryan@dynamicsfocus.com.