Satya Nadella addresses Microsoft layoffs, defends job cuts amid AI push

Microsoft CEO Satya Nadella has addressed the company’s massive job cuts in a candid memo to employees, acknowledging the emotional and professional toll of laying off over 9,000 workers.

He reportedly said the layoffs have been "weighing heavily" on him while defending the cuts as necessary for the Redmond giant’s AI transformation.

Also Read: Microsoft's largest layoff in years hits Xbox, sales, other divisions

Nadella's memo to staff

The layoffs, announced in July, represent around 7 per cent of Microsoft’s global workforce — its largest since 2014.

"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 to Microsoft employees.

“These decisions are among the most difficult we have to make,” Nadella wrote. “They affect people we've worked alongside, learned from, and shared countless moments with — our colleagues, teammates, and friends,” he said.

Record profits amid job cuts

Despite the scale of layoffs, Microsoft’s financial position reportedly remains strong. The company’s stock has surged 21 per cent this year, trading above $500 per share.

Over three fiscal quarters, it has posted $75 billion in net income. Nadella acknowledged the "uncertainty and seeming incongruence" of cutting jobs while the company thrives financially.

“By every objective measure, Microsoft is thriving and yet, at the same time, we've undergone layoffs,” he said.

He called this contradiction as "the enigma of success in an industry that has no franchise value," explaining that "progress isn't linear. "It’s dynamic, sometimes dissonant, and always demanding,” he added.

Also Read: Microsoft to sack 9,000 employees in second wave of layoffs this year

AI reshapes strategy

Central to Nadella’s message is Microsoft’s transformation from a “software factory to an intelligence engine.”

The company is reportedly investing $80 billion in AI infrastructure to maintain its leadership in the rapidly evolving tech landscape.

He envisions a world where “all 8 billion people could summon a researcher, an analyst, or a coding agent at their fingertips.”

"As we enter a new fiscal year, I've been reflecting on the journey we've shared and the road ahead," Nadella wrote.

He positioned the layoffs within the industry as a shift towards AI-led automation, which has resulted in over 80,000 tech job losses in 2025.

'Unlearning' and 'learning'

"We're investing more in CapEx than ever before. Our overall headcount is relatively unchanged, and some of the talent and expertise in our industry and at Microsoft is being recognized and rewarded at levels never seen before. And yet, at the same time, we've undergone layoffs," Nadella said.

Nadella reportedly stressed that achieving success in future "will be defined by our ability to go through this difficult process of 'unlearning' and 'learning.'"

He noted that this shift demands Microsoft to "meet changing customer needs, by continuing to maintain and scale our current business, while also creating new categories with new business models and a new production function."

Also Read: Satya Nadella’s speech at Build event disrupted as staffer raises ‘Free Palestine’ slogan

No word on future layoffs

While expressing "sincere" gratitude to those impacted by the layoffs, Nadella acknowledged that "their contributions have shaped who we are as a company, helping build the foundation we stand on today."

However, Nadella offered no assurances against future job cuts.

Instead, he urged remaining employees to adopt a “growth mindset” during the "messiness" of this transformation.