Microsoft CEO Explains Current Layoffs in Inside Memo

Regardless of Microsoft’s place because the No. 2 most beneficial firm on this planet, behind Nvidia, with a market worth of $3.8 trillion, the tech large has laid off greater than 15,000 folks this yr.

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

“Earlier than the rest, I wish to converse to what’s been weighing closely on me, and what I do know lots of you’re excited about: 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 progress. 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 said that the corporate is investing extra in AI infrastructure than ever earlier than, pouring over $80 billion into AI within the fiscal yr 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 “typically dissonant, and all the time demanding.” He famous that headcount at Microsoft “is comparatively unchanged” as the corporate continues to rent new staff, and he does not promise that there will not be extra layoffs sooner or later. Microsoft reported using 228,000 staff 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 unit” to an “intelligence engine.” He mentioned that the corporate’s future alternative was to deliver AI to all eight billion folks 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 large earnings not too long ago, with its web 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 yr, beating Wall Avenue expectations.

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

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