In a heartfelt memo to over 200,000 Microsoft employees, CEO
Satya Nadella has finally addressed the recent wave of job cuts at the tech
giant—even as the company reports record financial performance, historic stock
prices, and unprecedented investment in artificial intelligence (AI).
“Before anything else, I want to speak to what's been
weighing heavily on me and what I know many of you are thinking about: the
recent job eliminations,” Nadella wrote on Thursday. In 2025 alone, Microsoft
has laid off more than 15,000 employees, including an additional 2,000 who were
classified as underperformers. This represents nearly 7% of its global
workforce—the largest reduction since 2014.
The timing of the layoffs has sparked widespread criticism,
particularly because Microsoft is thriving by all conventional metrics. The
company has reported $75 billion in net income across the last three fiscal
quarters. On July 9, its stock closed above $500 for the first time—up 21%
since the beginning of the year. Microsoft is also pumping $80 billion into AI
infrastructure, signalling a bold new phase of technological transformation.
Nadella attempted to reconcile the apparent contradiction
between business success and workforce cuts, calling it “the enigma of success
in an industry that has no franchise value.” He emphasized that “progress isn’t
linear. It’s dynamic, sometimes dissonant, and always demanding.”
The CEO highlighted that Microsoft’s total headcount has
remained “relatively unchanged,” implying that many roles have simply shifted
or evolved in response to new priorities—especially AI. “We must reimagine our
mission for a new era,” Nadella said, pointing to a transition from being a
software company to an “intelligence engine” designed to empower people through
AI tools.
Despite Nadella’s message of transformation and gratitude
toward outgoing employees, the internal mood remains tense. On platforms like
LinkedIn and X (formerly Twitter), several former Microsoft staff members
expressed their disappointment and questioned the alignment between the
company’s stated values and its actions. One longtime employee said, “I have
loved working for this company, still do, but this has done so much damage to
that loyalty.”
The layoffs at Microsoft reflect a broader trend across the
tech industry in 2025, with more than 80,000 positions eliminated so far.
Competitors like Recruit Holdings have also slashed jobs, citing the changing
landscape due to AI.
Microsoft, now the second most valuable publicly traded
company after Nvidia, continues to dominate markets with its Windows, Office,
and Azure cloud services. Yet Nadella offered no assurances against future job
cuts, instead urging employees to embrace a “growth mindset” during what he
called the “messiness” of transformation.
“As we begin a new fiscal year, I've been reflecting on the
road we've travelled together and the path ahead,” he concluded. “This is our
moment to shape what comes next—with clarity, courage, and conviction.”
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