Microsoft CEO Explains Recent Layoffs in Internal Memo

Regardless of Microsoft’s place because the No. 2 most valuable company on the planet, behind Nvidia, with a market value of $3.8 trillion, the tech large has laid off greater than 15,000 folks this 12 months.

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 selections a few of “probably 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 lots of you’re desirous 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 occasions we’re in” however famous that Microsoft is “thriving,” with distinctive market efficiency, technique, and development. For instance, Microsoft’s inventory value rose to an all-time high, hitting a closing value 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 12 months that led to June.

“Microsoft is being acknowledged and rewarded at ranges by no means seen earlier than,” Nadella wrote. “And but, on the similar time, we have undergone layoffs. That is the enigma of success in an business 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 “generally 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 would 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 Pictures}

Within the memo, Nadella additionally redefined Microsoft’s mission from a “software program manufacturing unit” to an “intelligence engine.” He stated that the corporate’s future alternative was to bring AI to all eight billion folks 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 earnings 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 12 months, beating Wall Avenue expectations.

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

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