Microsoft Israel GM Alon Haimovich: AI Era Means Success Without More Employees

In the midst of historic growth and rapid technological advances, Microsoft is redefining its identity. No longer content to be simply a software company, it is positioning itself as an “intelligence engine” for organizations worldwide. This transformation, driven by breakthroughs in cloud computing and AI tools like Copilot, comes even as the company has undergone significant restructuring, laying off 9,000 employees globally earlier this year. In an interview with Calcalist, Alon Haimovich, Israel Country Manager at Microsoft, explains why the AI era demands new skills, how autonomous AI agents are reshaping industries, and why Israel should focus on talent and collaboration instead of competing with tech superpowers on infrastructure.

Microsoft’s workforce changes amid AI growth

Q: Alon Haimovich, how do you explain that Azure and AI technologies like Copilot are boosting Microsoft, yet the company laid off 9,000 employees globally? Microsoft is a company of enormous size, with meteoric growth on one hand, that has decided to make adjustments to its workforce. Saying goodbye to employees is always difficult, but in an email sent at the end of July, CEO Satya Nadella essentially said that in the age of artificial intelligence, the old equation—business success equals more employees—needs rethinking. It’s a dramatic paradigm shift. It’s like saying, ‘The king has no clothes.’ Nadella’s letter explained why Microsoft was reducing headcount despite strong business performance, outlining a new worldview for the AI era. The company no longer seeks to be just a seller of software products, but an intelligence engine for its customers. I have no doubt we’ll see more organizations go through this kind of structural change, closing departments that don’t contribute to growth, and adding employees in areas where they want to expand. There’s an opportunity here: employees who are curious and willing to learn new, relevant tools will thrive, while those focused on routine, repetitive tasks may find their roles disappearing. Others, however, will grow.

Transforming Microsoft into an AI engine

Q: How does Microsoft want to transform itself from a software company to an AI engine for customers? Until now, big tech companies invested heavily in cutting-edge infrastructure so customers could run their own generative AI tools. Now, we want to differentiate ourselves by becoming the platform for companies, organizations, and startups to build exactly the AI tools they need for their own purposes. That’s the transformation. Q: Is anyone who doesn’t contribute to the AI revolution in danger of losing their job? Both they and their employers are at risk. The required skill set today is very different from before. Microsoft still has over 220,000 employees, but now, every one of them, when preparing a business plan, is expected to know how to use an AI agent to generate quotes, boost sales using AI, and identify duplication of work that might make certain roles redundant.

Microsoft Israel’s position amid global layoffs

Q: What happened in Israel in the global wave of layoffs? Are there more new jobs or more layoffs? Saying goodbye to employees is never easy, but in terms of the overall balance, we came out of this round of layoffs in a strong position. I won’t get into specific numbers, but Microsoft Israel’s business arm is one of the fastest growing in the world, and Microsoft continues to invest in it.

Practical AI applications: Copilot and AI agents

You demonstrated a voice conversation with Microsoft’s Copilot for our interview, AI software that sounds like a friendly colleague. What’s the idea? It’s about showing a practical AI application. I can have these conversations with Copilot on my way to a meeting in any field and prepare en route. I just used the professional version, but there’s also a simpler version in the browser. Copilot can help with more complex meetings too. For example, if I’m moderating a panel with several funds from different industries, I can ask: ‘How do I involve everyone in the discussion? What’s the story that will connect them, and which question should I ask when and to whom?’ Today there’s also a ‘Security Copilot’ that can help a beginner analyst easily identify where to start investigating a security breach and improve their abilities. This applies to every field. Q: Does it help with that too? It’s similar to what ChatGPT does, we have a conversation, develop it into text and voice, but it’s not autonomous. You ask a question and get an answer. An AI agent is one step further. For example, I can say: ‘Plan me a trip to Greece with a beachfront villa, authentic food, and minimal tourists. Book the flights and hotels.’ The agent doesn’t just answer, it executes the plan, step by step, with my feedback, until it’s done. That opens up endless applications where you’re not just asking for information or content, but the AI acts on your behalf. Let’s say: ‘Apply for National Insurance on my behalf and complete the process by the end of the day.’ Or: hire a new employee, assign them a phone, car, salary, and workspace. The agent does it autonomously. Is it scary? Maybe, but it’s also full of opportunities.

AI applications in Israel

One example is mental health in Israel since October 7. There can be 1,000 potential patients for every psychiatrist, and many can’t even get an initial consultation. The Ministry of Defense and the Rehabilitation Division are already using Mentaily, developed with Sheba Medical Center and based on Microsoft technology, to run an initial triage conversation through LIV, an AI tool that classifies urgency and is now built into the process of requesting recognition for a condition.

Israel’s AI strategy and challenges

The Nagel Committee’s conclusions on accelerating AI in Israel recommend investing 25 billion shekels over five years, including 18 billion in building an Israeli AI language model. Spending 18 billion shekels on supercomputing won’t make the difference. Israel has an opportunity to leap forward in every field thanks to AI, and we already have 2,000 AI-based startups out of 7,000 total. The government’s role is to enable and accelerate. But we must recognize what we do best, and what’s better left to others. Israel isn’t China or the U.S., and we don’t have the budget to compete on superpower-scale AI infrastructure. Instead, we should give our research community and startups access to the world’s most advanced AI platforms through partnerships with the largest global companies. Why? Because Israel can’t match the investment levels of companies like Microsoft, which spends $80 billion a year on AI infrastructure. The big tech firms together invest over $300 billion annually. Israel can’t compete at that scale, nor should it. It’s better to leverage their platforms. We manage over 1,900 language models ourselves. Building a supercomputer in Israel is important, but by the time it’s ready, the technology will have already moved on.

What else will help Israel move forward?

Talent development. We need training programs, from schools to professional courses, to prepare developers for building advanced technologies. And we must raise cyber awareness. Israel is a target for major cyberattacks, and AI increases the risks. We have to ensure AI is developed securely and responsibly so it doesn’t cause harm.

Microsoft’s AI investment and returns

Microsoft is spending a lot of money on AI. When will it pay off? I feel the benefits already. But when you invest $80 billion in AI, the return isn’t immediate. AI success requires massive investment, and it’s an evolution, not a quick win. Over time, it will pay for itself.

Alon Haimovich’s personal journey

Tell us about your own path, from a technician at Bynet in Kiryat Motzkin to a senior Cisco executive, and now Country Manager at Microsoft Israel. I started as a technician driving a Kangoo van, soldering sockets into walls. This was before most people knew what the internet was. I’m not the smartest person in the room, but I’m obsessed with success, love learning, face challenges head-on, and work hard. That took me from technology into sales. I was VP of Technology at Cisco for many years, then moved into business leadership, and here I am.

What do you look for in employees?

A manager shouldn’t be a know-it-all or emotionally detached. I believe your employees should be better than you. My advantage is seeing the future more clearly than others and breaking it into clear steps. I need to know who I can learn from to make it work.

Interview style

How does that show up in a job interview? When I interviewed my CTO, he began explaining cybernetics in detail. I stopped him and said: ‘Now explain it to your grandmother in three sentences.’ Why? Because in our world, communication must be clear and impactful, otherwise it’s ineffective.

Future goals

What do you need to achieve before thinking about your next role? I approach every job as if it’s my last, even when I was an installation technician. Microsoft Israel is one of the fastest-growing sites in the company worldwide. My goal is to keep that momentum going through one of the biggest revolutions of our time. That excites me.

Originally published at Calcalist on Mon, 11 Aug 2025.

Frequently Asked Questions (FAQ)

The Impact of AI on Workforce and Business Strategy

Q: How is AI changing the traditional definition of business success? A: The traditional view that business success equals more employees is being challenged. AI enables organizations to achieve greater output and efficiency, potentially decoupling success from headcount growth. Q: What is the role of AI agents in reshaping industries? A: AI agents are powerful tools that can execute tasks autonomously, from generating quotes and boosting sales to managing complex processes like trip bookings or even hiring. This autonomous capability is fundamentally reshaping how businesses operate across various sectors. Q: Why is talent development crucial for Israel's AI strategy? A: Given that Israel cannot compete with superpowers on infrastructure investment, focusing on nurturing talent through training programs is paramount. This allows Israeli companies and researchers to leverage advanced AI platforms and drive innovation. Q: How is Microsoft transforming into an "intelligence engine"? A: Microsoft is shifting from being a software product seller to becoming a platform that enables companies to build their own custom AI tools. This transformation is driven by advancements in cloud computing and AI services like Copilot. Q: What skills are essential for employees in the AI era? A: Employees need to be curious and adept at using new AI tools. Proficiency in using AI agents for tasks like generating quotes, sales boosts, and identifying redundancies is becoming crucial for career progression. Q: How does Microsoft approach AI infrastructure investment compared to national strategies? A: Microsoft invests heavily in AI infrastructure (e.g., $80 billion annually), recognizing that national strategies cannot realistically compete at this scale. Instead, the focus should be on leveraging global platforms through partnerships. Q: What is the primary strategy for Israel to excel in the AI revolution? A: Israel should focus on its strengths in talent and collaboration, partnering with global tech giants to access advanced AI platforms, rather than attempting to compete on large-scale infrastructure development. Q: How can businesses ensure AI is developed and used securely and responsibly? A: It's critical to raise cyber awareness and implement robust security measures throughout the AI development lifecycle. This ensures that AI technologies are used ethically and do not cause harm.

AI Applications and Microsoft Technologies

Q: Can you provide examples of practical AI applications beyond basic chatbots? A: Beyond conversational AI like Copilot, AI agents can perform complex, autonomous tasks. An example is booking a trip based on specific preferences, or managing administrative processes like applying for insurance or hiring new employees. Q: How does Microsoft's Copilot assist in business operations? A: Copilot can help prepare for meetings by providing relevant information, suggest strategies for engaging participants in discussions, and even help draft questions for panels. For cybersecurity, Security Copilot aids analysts in identifying and investigating security breaches. Q: What are the security implications of AI agents acting autonomously? A: While autonomous AI agents offer immense opportunities, their ability to act on behalf of users, such as booking flights or managing insurance applications, raises potential security and control concerns that need careful consideration and robust safeguards. Q: How is AI being applied in Israel's specific context, such as mental health post-October 7? A: AI is being used to address critical needs, like in mental health where AI tools are employed for initial triage conversations, helping manage the high demand for psychiatric services by classifying urgency and streamlining the recognition process for conditions.

Microsoft's Business Evolution and Future Outlook

Q: How does Microsoft's $80 billion AI investment translate into returns? A: While not immediate, the benefits of substantial AI investment are already being felt. The company views AI success as an evolution that will eventually pay for itself through enhanced capabilities and new revenue streams. Q: What is Microsoft Israel's growth trajectory? A: Microsoft Israel is experiencing one of the fastest growth rates globally within Microsoft, indicating strong investment and a positive outlook for the region. Q: What qualities does Alon Haimovich look for in employees? A: He values employees who are better than him, possess clear communication skills, are passionate about learning, and are driven by success. He believes in leading by example and fostering a collaborative environment where learning from others is key.

Crypto Market AI's Take

The insights from Microsoft Israel's GM, Alon Haimovich, about the transformative power of AI and the shift towards "intelligence engines" resonate strongly with our mission at AI Crypto Market. Haimovich's emphasis on AI agents executing tasks autonomously mirrors our development of sophisticated AI-powered AI Agents designed to navigate the complexities of the cryptocurrency market. The idea that success in the AI era is decoupled from employee count aligns with how our platform empowers users with automated solutions for trading and analysis, enabling greater efficiency and potentially higher returns without requiring a larger team. His comments on Israel's strategy of focusing on talent and leveraging global platforms also highlight the importance of expertise and collaboration in the fast-evolving tech landscape, a principle we apply in building our team and platform.

Microsoft Israel GM: ‘In the AI era, success no longer means more employees’