Microsoft CEO Explains Recent Layoffs in Internal Memo

Despite Microsoft’s position as the No. 2 most valuable company in the world, behind Nvidia, with a market value of $3.8 trillion, the tech giant has laid off more than 15,000 people this year.

In a memo to staff on Thursday morning, released publicly on Microsoft’s corporate blog, Microsoft CEO Satya Nadella addressed the recent job cuts, calling the decisions some of “the most difficult” that he had to make.

“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.

Related: Microsoft Is Laying Off More Workers as AI Continues to Trim Workforces

Nadella acknowledged “the uncertainty and seeming incongruence of the times we’re in” but noted that Microsoft is “thriving,” with exceptional market performance, strategy, and growth. For example, Microsoft’s stock price rose to an all-time high, hitting a closing price above $500 for the first time earlier this month.

Nadella also stated that the company is investing more in AI infrastructure than ever before, pouring over $80 billion into AI in the fiscal year that ended in June.

“Microsoft is being recognized and rewarded at levels never seen before,” Nadella wrote. “And yet, at the same time, we’ve undergone layoffs. This is the enigma of success in an industry that has no franchise value.”

Nadella explained the disconnect between thriving financials and layoffs by stating that “progress isn’t linear” and that it is “sometimes dissonant, and always demanding.” He noted that headcount at Microsoft “is relatively unchanged” as the company continues to hire new workers, and he doesn’t promise that there won’t be more layoffs in the future. Microsoft reported employing 228,000 workers as of June 2024.

^{Microsoft CEO Satya Nadella. Photographer: Chona Kasinger/Bloomberg via Getty Images}

In the memo, Nadella also redefined Microsoft’s mission from a “software factory” to an “intelligence engine.” He said that the company’s future opportunity was to bring AI to all eight billion people on the planet.

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

Meanwhile, Microsoft has made huge profits recently, with its net income equaling about $75 billion across its last three fiscal quarters. For the first three months of 2025, the company’s profit rose to $25.8 billion, up 18% from the previous year, beating Wall Street expectations.

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

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