In a recent memo to employees, Microsoft CEO Satya Nadella addressed the company's decision to lay off over 15,000 workers in 2025, describing it as one of the most challenging leadership decisions. Despite these significant reductions, Nadella emphasized that Microsoft remains resilient, driven by strategic shifts in artificial intelligence (AI), cloud computing, and enterprise technology.
Nadella acknowledged the emotional weight of the layoffs, stating, "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. These decisions are among the most difficult we have to make." (cnbc.com)
The layoffs, which affected approximately 7% of Microsoft's global workforce, were part of a broader strategy to realign the company's focus toward AI and cloud infrastructure. In early July alone, 9,000 jobs were eliminated, impacting divisions such as Xbox sales and regional offices, including about 850 positions in Washington state. Despite these cuts, Microsoft's overall headcount has remained relatively stable, as the company continues to hire in key areas, particularly in AI and cloud services. (cnbc.com)
Nadella referred to the paradox of implementing layoffs amid record market performance as the "enigma of success." He explained that in the rapidly evolving tech industry, companies must continually adapt to stay competitive. "We are no longer just a software factory. We're becoming an intelligence engine, empowering every individual and organization to build whatever they need to achieve using AI," he said. (cnbc.com)
As part of its AI-driven transformation, Microsoft has integrated AI usage into employee performance reviews. Julia Liuson, President of Microsoft's Developer Division, informed employees that utilizing AI tools like Microsoft Copilot is "no longer optional—it's core to every role and every level." Internal discussions are ongoing to incorporate AI usage metrics into employee evaluations in the coming year, encouraging broader adoption of the company's AI platforms. (techstory.in)
The recent layoffs have predominantly affected traditional sales roles, which Microsoft plans to phase out in favor of more technical "solutions engineers." These new positions are designed to demonstrate AI-powered tools directly to customers, aligning with Microsoft's goal of "a Copilot on every device and across every role," according to Sales Chief Judson Althoff. (techstory.in)
In response to criticism over the layoffs, particularly concerning the hiring of foreign workers, U.S. Senator J.D. Vance publicly criticized Microsoft for laying off American employees while continuing to apply for H-1B work visas. Vance stated, "I don't want to see companies lay off 9,000 American workers and then tell me that they can't find talent here. That's a bullst story," urging a re-examination of tech industry hiring practices. (techstory.in)
To prepare its workforce for this evolving landscape, Microsoft is encouraging employees to "invest in your own AI skilling." The company is offering internal training and resources to help staff transition into more AI-focused roles, ensuring they remain competitive in the changing tech environment. (techstory.in)
In summary, while the recent layoffs at Microsoft have been substantial and challenging, they are part of a strategic effort to reposition the company as a leader in AI and cloud computing. By investing in AI infrastructure and encouraging employees to develop AI skills, Microsoft aims to stay at the forefront of technological innovation.
Source:** The Daily Jagran Microsoft CEO Satya Nadella Breaks Silence After 15,000 Layoffs, Says Company Must Evolve Or Fall Behind
