Microsoft CEO Explains Recent Layoffs in Internal Memo

Regardless of Microsoft’s place because the No. 2 most respected firm on the earth, behind Nvidia, with a market worth of $3.8 trillion, the tech large has laid off greater than 15,000 individuals this 12 months.

In a memo to workers on Thursday morning, launched publicly on Microsoft’s company weblog, Microsoft CEO Satya Nadella addressed the latest job cuts, calling the choices a few of “probably the most tough” that he needed to make.

“Earlier than the rest, I need to converse to what’s been weighing closely on me, and what I do know a lot of you might be fascinated by: the latest job eliminations,” Nadella wrote.

Associated: Microsoft Is Laying Off Extra Employees as AI Continues to Trim Workforces

Nadella acknowledged “the uncertainty and seeming incongruence of the instances we’re in” however famous that Microsoft is “thriving,” with distinctive market efficiency, technique, and development. For instance, Microsoft’s inventory worth rose to an all-time excessive, hitting a closing worth above $500 for the primary time earlier this month.

Nadella additionally acknowledged that the corporate is investing extra in AI infrastructure than ever earlier than, pouring over $80 billion into AI within the fiscal 12 months that resulted in June.

“Microsoft is being acknowledged and rewarded at ranges by no means seen earlier than,” Nadella wrote. “And but, on the identical time, we have undergone layoffs. That is the enigma of success in an trade that has no franchise worth.”

Nadella defined the disconnect between thriving financials and layoffs by stating that “progress is not linear” and that it’s “generally dissonant, and at all times demanding.” He famous that headcount at Microsoft “is comparatively unchanged” as the corporate continues to rent new employees, and he would not promise that there will not be extra layoffs sooner or later. Microsoft reported using 228,000 employees as of June 2024.

^{Microsoft CEO Satya Nadella. Photographer: Chona Kasinger/Bloomberg by way of Getty Photos}

Within the memo, Nadella additionally redefined Microsoft’s mission from a “software program manufacturing facility” to an “intelligence engine.” He mentioned that the corporate’s future alternative was to convey AI to all eight billion individuals on the planet.

Associated: Microsoft Government Says Utilizing AI Has Saved $500 Million in Productiveness Prices, because the Firm Conducts Mass Layoffs

In the meantime, Microsoft has made enormous income not too long ago, with its internet revenue equaling about $75 billion throughout its final three fiscal quarters. For the primary three months of 2025, the corporate’s revenue rose to $25.8 billion, up 18% from the earlier 12 months, beating Wall Avenue expectations.

Microsoft inventory is up 22% year-to-date.

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