Microsoft Corp. Vice Chair and President Brad Smith is advising students to avoid panic regarding artificial intelligence-driven job disruption, arguing that the transformation will unfold over 25 years rather than causing immediate economic upheaval.

In an interview with Axios published Tuesday, Smith addressed growing fears about AI and jobs, suggesting that anxiety is being amplified by hype from parts of the tech industry. "Nobody knows for sure, but let's not panic," Smith said, noting that recent commencement ceremonies saw students booing mentions of AI, indicating a desire for a voice in how the technology is deployed.

Smith, who has been with Microsoft for 33 years, highlighted that graduates are already facing economic uncertainty and a rapidly changing job market, with AI intensifying these concerns. In an essay published this month, he outlined a strategy for long-term career success, urging individuals to develop expertise in a field that fascinates them while mastering practical AI knowledge.

AI Will Change Jobs, But Not Overnight

Smith acknowledged that concerns about AI-driven job losses are valid, noting that entry-level roles are facing pressure from automation. He described a "perfect storm" for new graduates, where companies are reducing headcount while spending heavily on AI infrastructure. However, he pushed back against predictions of rapid economic disruption, stating, "This is going to unfold over 25 years, not two-and-a-half."

He argued that tech leaders often overestimate the speed of technological change and underestimate people's ability to adapt. Comparing AI to earlier major technologies like computers and electricity, Smith said these innovations reshaped tasks over time rather than eliminating all jobs at once.

Use AI As A Tool, Not A Replacement

Smith advised people to view their jobs as a collection of tasks, some of which can be handled or improved by AI, while others still require human judgment. For most people, AI will likely serve as a productivity tool rather than a direct replacement. He emphasized that human traits such as curiosity, creativity, compassion, communication, and courage will become increasingly valuable in the AI era.

The comments come as debate around AI's long-term impact intensifies. Anthropic CEO Dario Amodei recently warned that advanced AI could create larger labor-market disruptions than previous technological shifts. Meanwhile, Microsoft Corp. CEO Satya Nadella has urged a practical approach to AI adoption, warning against using frontier models for non-frontier problems. Smith urged focusing on using AI as a tool to help people do better work, rather than replacing them.

Microsoft Corp.'s Xbox division is preparing significant layoffs and budget cuts next month as new CEO Asha Sharma moves to overhaul the gaming business amid declining revenue and profitability. The restructuring efforts are expected to commence shortly after Microsoft's fiscal year ends on June 30. Xbox plans to reduce spending on marketing and other areas to improve margins, according to a report by Bloomberg News.

Studio Closures and Spin-offs

Several studios in Microsoft Corp.'s Xbox gaming division, including Compulsion Games and Double Fine, are in active negotiations to spin off from the company. These discussions are part of the broader cost-cutting measures and strategic realignment under new leadership. The potential closures and spin-offs aim to streamline operations and focus resources on high-performing assets.

Copilot Adoption Drives Analyst Optimism

Despite the challenges in the gaming unit, BNP Paribas reiterated Microsoft as a top AI software and cloud infrastructure pick. Analyst Stefan Slowinski highlighted accelerating Copilot adoption, expanding enterprise deployments, and a potential evolution toward a higher-value seat-plus-consumption pricing model. Following investor meetings with management, Slowinski indicated Microsoft could exceed its outlook for more than 25 million Copilot seats in the fiscal fourth quarter. This growth is supported by stronger customer usage, product improvements, and large-scale rollouts such as NHS England's 500,000-seat deployment.

Analyst Ratings and Price Targets

BNP Paribas maintained its Outperform rating and $555 price forecast on Microsoft shares, implying roughly 40% upside from recent levels. The stock carries a Buy rating with an average price forecast of $560.00. Recent analyst actions include:

Technical Analysis and Market Performance

Microsoft is trading 7.7% below its 20-day SMA ($421.43) and 14.5% below its 200-day SMA ($454.86), keeping the longer-term trend tilted lower. The stock is also 5% to 6% below its 50-day and 100-day averages. Momentum indicators suggest fading upside pressure, with the MACD below its signal line and a negative histogram. Key resistance stands at $433.00, while key support is located at $381.50. Microsoft shares were down 2.71% at $386.61 at the time of publication on Thursday.