Microsoft CEO Satya Nadella has acknowledged the emotional weight of the company’s recent decision to lay off over 15,000 employees, calling it one of the most difficult choices the tech giant has had to make. In a memo addressed to Microsoft’s 200,000+ workforce, Nadella emphasized that the move, while painful, was essential to support the company’s strategic pivot toward artificial intelligence.
“Before anything else, I want to speak to what’s been weighing heavily on me,” Nadella wrote. “These decisions impact colleagues, teammates, and friends—people we’ve shared our professional lives with. It’s never easy.”
The layoffs, which amount to roughly 7% of Microsoft’s global workforce, mark the largest round of job cuts at the company since 2014. Despite the reductions, Microsoft has reported a record-setting financial year, with its stock climbing 21% and netting $75 billion in income across three fiscal quarters.
In his memo, Nadella acknowledged the seeming contradiction between robust business performance and widespread job losses. “By every objective measure, Microsoft is thriving—our market position, growth, and strategic outlook are all strong. And yet, we’ve had to make these cuts,” he said, referring to both the layoffs and performance-based staff reductions.
Nadella framed the decision as part of the broader transformation underway at Microsoft as it deepens its investments in AI. “Progress isn’t linear,” he noted. “It’s dynamic, sometimes dissonant, and always demanding. But it also opens new doors for us to lead and make a broader impact.”
The company has also increased its capital expenditures significantly, signaling continued investment in AI infrastructure and cloud capabilities. While overall headcount remains stable due to strategic hiring, the layoffs reflect a recalibration to align talent with evolving priorities.
Microsoft’s move comes amid a broader trend across the tech industry, where companies are balancing aggressive innovation with operational efficiency. The layoffs, though controversial, highlight the shifting nature of work in the AI era—where transformation can come with a human cost.