Microsoft CEO Explains Recent Layoffs in Internal Memo

Regardless of Microsoft’s place because the No. 2 most valuable company on this planet, behind Nvidia, with a market value of $3.8 trillion, the tech big has laid off greater than 15,000 individuals this yr.

In a memo to staff on Thursday morning, launched publicly on Microsoft’s company weblog, Microsoft CEO Satya Nadella addressed the current job cuts, calling the choices a few of “essentially the most troublesome” 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 about: the current job eliminations,” Nadella wrote.

Associated: Microsoft Is Laying Off More Workers 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 high, 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 at all times demanding.” He famous that headcount at Microsoft “is comparatively unchanged” as the corporate continues to rent new employees, and he does not promise that there will not be extra layoffs sooner or later. Microsoft reported using 228,000 workers as of June 2024.

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

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

Associated: Microsoft Executive Says Using AI Has Saved $500 Million in Productivity Costs, as the Company Conducts Mass Layoffs

In the meantime, Microsoft has made huge profits 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 yr, beating Wall Avenue expectations.

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

^{Be part of high CEOs, founders and operators on the Level Up conference to unlock methods for scaling your small business, boosting income and constructing sustainable success.}