In Short
- Microsoft cut over 15,000 jobs in 2025
- CEO Satya Nadella assured headcount remains ‘basically flat’ despite layoffs
- He calls for reimagining Microsoft’s mission for AI era
Microsoft’s headcount has taken a serious hit in 2025, with more than 15,000 roles slashed so far this year. Now, the emotional toll of the ongoing layoffs appears to be weighing on none other than CEO Satya Nadella himself. In a heartfelt memo sent to employees on Thursday, Nadella addressed the company’s latest wave of job cuts, around 9,000 in early July, and the anxiety rippling across teams.
“Before anything else, I want to speak to what’s been weighing heavily on me, and what I know many of you are thinking about: the recent job eliminations,” Nadella wrote, according to the CNBC report. As of June 2024, Microsoft’s global workforce stood at 2,28,000. Though the company hasn’t disclosed an updated figure reflecting the 2025 cuts, Nadella insisted in his note that total headcount remains “basically flat.”
Despite the company’s sharp reductions, investor confidence remains sky-high. On July 9, Microsoft stock closed above $500 for the first time, just a week after the most recent layoffs were announced. That surge is largely attributed to Microsoft’s commanding position in artificial intelligence, cloud computing, and enterprise software.
He didn’t sugarcoat the contradictions.
“This is the enigma of success in an industry that has no franchise value,” Nadella wrote. “Progress isn’t linear. It’s dynamic, sometimes dissonant, and always demanding. But it’s also a new opportunity for us to shape, lead through, and have greater impact than ever before.”
But Microsoft isn’t alone in making painful staffing decisions. Across the tech sector, more than 80,000 positions have been cut in 2025 alone, as companies recalibrate in an AI-first world. Recruit Holdings, the firm behind job sites Indeed and Glassdoor, recently revealed plans to axe 1,300 roles in its HR tech division, with its CEO pointing squarely to artificial intelligence as the catalyst.
Ironically, AI is also what’s fuelling much of the optimism around Microsoft’s future. Azure, the company’s cloud computing arm, has seen accelerated growth as AI firms, including OpenAI, snap up access to Nvidia chips to train and run their large language models. Microsoft’s longstanding franchises, Windows and Office, remain firmly entrenched, providing a rock-solid foundation for its AI ambitions.
While acknowledging the upheaval, Nadella also used his memo to signal a new phase in Microsoft’s broader vision. For the past decade, the company’s mission has been “to empower every person and every organisation on the planet to achieve more.” Now, he suggests, that ethos must evolve for the AI era.
“We must reimagine our mission for a new era,” he wrote. “What does empowerment look like in the era of AI? It’s not just about building tools for specific roles or tasks. It’s about building tools that empower everyone to create their own tools. That’s the shift we are driving, from a software factory to an intelligence engine empowering every person and organisation to build whatever they need to achieve.”
With emotions running high and strategic changes underway, Microsoft is now heading into a critical earnings season. The company is set to report its fiscal fourth-quarter results on Wednesday, and both Wall Street and its workforce will be watching closely.
The mood at Microsoft is a mix of nervous energy and bold ambition. As the company pivots deeper into AI and trims down to become leaner, questions remain about how its people, and its purpose, will adapt.
