Microsoft CEO Satya Nadella has openly addressed the company’s recent layoffs, showing both empathy and determination as the tech giant pivots deeper into artificial intelligence (AI). His recent memo to over 200,000 employees gives a rare, honest perspective about why these tough decisions had to be made—even as Microsoft enjoys record profits.
A Difficult Yet Necessary Move
In the candid letter, Nadella admitted that letting go of more than 9,000 employees—about 7% of Microsoft’s global workforce—has been “weighing heavily” on his mind and heart. He talked directly to the Microsoft staff, saying, “These decisions are among the hardest things we do. They’re not just numbers—they’re colleagues, teammates, and friends we’ve shared so much with.”
This round of layoffs marks Microsoft’s largest workforce reduction since 2014. It is especially striking because it comes at a time when the company is thriving—Microsoft’s stock price has jumped 21% this year, climbing past $500 per share, and the company posted nearly $75 billion in net income across the last three fiscal quarters.
Satya Nadella didn’t avoid the “awkwardness” of major cuts during a period of huge success. He acknowledged, “By every objective measure, Microsoft is thriving—our market performance, our strategy, our growth are all positive.” The company is also investing more in infrastructure than ever.
Still, jobs are being cut. “And yet, we’ve undergone layoffs,” Nadella said. Why is this happening? He called it the “enigma of success” in technology—a world where progress is unpredictable, “dynamic, sometimes dissonant, and always demanding.” In other words, even booming companies must adapt quickly and sometimes painfully, especially as new technologies change everything around them.
Microsoft’s AI Transformation: The Main Driver
The biggest reason behind this workforce shakeup is Microsoft’s decision to transform from a “software factory” into what Nadella calls an “intelligence engine.” The company is investing $80 billion in AI infrastructure, aiming to give anyone—from students to small businesses—the power to access intelligent research, analytics, or coding tools instantly.
To move forward, Nadella says Microsoft must keep learning and “unlearning”—letting go of old habits and embracing new business models. He made it clear the AI revolution is changing the entire tech industry, and Microsoft needs to stay ahead, even if that means restructuring teams and skills.
Gratitude for Those Leaving, and No Promises for the Future
Nadella took time in his message to thank every employee impacted by the layoffs. He wrote, “Your contributions have shaped who we are. You helped build the foundation we stand on today.” He acknowledged the pain, especially losing close colleagues who helped make Microsoft what it is now.
However, he also cautioned that ongoing change means there are no guarantees against future layoffs. He asked employees to focus on a “growth mindset”—the ability to keep learning, adapting, and staying positive even when the path isn’t smooth.
As Microsoft starts a new fiscal year, Nadella reflected on the challenges and the “messiness” of real transformation. The push into AI is exciting, but it demands hard choices and readiness to evolve quickly. He underlined that the tech industry, unlike others, never stands still. The jobs of today look very different because tomorrow’s work will require new skills and approaches.
In the end, Satya Nadella’s memo shows humanity, honesty, and a clear-eyed look at what it really takes for a global company like Microsoft to survive and lead in a rapidly changing, AI-powered world. While the layoffs are tough for all involved, Nadella reminded his team that transformation always brings discomfort—yet also the possibility for greater innovation and future opportunity.