Microsoft CEO Satya Nadella has expressed deep concern over the tech giant’s recent wave of job cuts, admitting that the decision has been “weighing heavily” on him.
In a candid reflection, Nadella acknowledged the personal and emotional toll of laying off employees, even as the company navigates shifting market dynamics and realigns its strategic priorities. His comments come amid broader industry-wide restructuring as major tech firms grapple with economic uncertainty and a renewed focus on efficiency.
In a heartfelt company-wide memo, he wrote,
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“As we begin a new fiscal year, I’ve been reflecting on the road we’ve traveled together and the path ahead. Before anything else, I want to speak about what’s been weighing heavily on me and what I know many of you are thinking about: the recent job eliminations. These decisions are among the most difficult we have to make. They affect people we’ve worked alongside, learned from, and shared countless moments with—our colleagues, teammates, and friends.
“I want to express my sincere gratitude to those who have left. Their contributions have shaped who we are as a company, helping build the foundation we stand on today. And for that, I am deeply grateful. I also want to acknowledge the uncertainty and seeming incongruence of the times we’re in.
“By every objective measure, Microsoft is thriving our market performance, strategic positioning, and growth all point up and to the right. 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 are being recognized and rewarded at levels never seen before. And yet, at the same time, we’ve undergone layoffs.”
Microsoft employed 228,000 people as of June 2024. This calendar year, the company has held several rounds of layoffs. In January, it cut less than 1% of headcount based on performance. Fast forward to June 2025, Microsoft laid off about 9,000 employees. The move affected less than 4% of its global workforce across different teams. The 50-year-old software company slashed more than 6,000 jobs in May and then at least 300 more in June. The tech giant is reshaping how it works streamlining management, investing heavily in AI, and transitioning to a more agile organization that can compete in a rapidly changing tech landscape.
One major reason behind the job cuts is Microsoft’s goal to flatten its corporate hierarchy. By reducing layers of management, the company hopes to respond faster to market demands, improve decision-making, and cut operational costs. Notably, the incessant job cut comes as it plans to invest roughly $80 billion this fiscal year in AI infrastructure. This includes expanding Azure data centers, developing new tools like Copilot, and enhancing machine learning capabilities. Such investments, while essential for long-term competitiveness, require reallocation of resources.
Talking about the company’s priority, Satya noted that Microsoft is focused on the business priorities which include, security, quality, and AI transformation. The company is doubling down on fundamentals while continuing to define new frontiers in AI. As AI becomes more central to Microsoft’s operations, new roles will likely open up in cloud computing, machine learning, and data engineering.
