Microsoft CEO Satya Nadella has addressed the recent wave of job cuts at the tech giant, even as the company reports soaring profits, record stock prices, and unprecedented investment in artificial intelligence (AI). In a memo sent to employees on Thursday, Nadella acknowledged the concerns around the layoffs, saying, “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.”
So far in 2025, Microsoft has laid off over 15,000 employees. In addition, around 2,000 staff who were deemed underperformers have also been let go.
This comes at a time when Microsoft is enjoying strong financial performance. The company has reported approximately $75 billion in net income over the past three fiscal quarters, according to Business Insider. Meanwhile, it is investing $80 billion in AI infrastructure, and its shares recently closed above $500 for the first time on 9 July — a record high.
Nadella attempted to explain the reasoning behind the job cuts, despite the company’s apparent success. “By every objective measure, Microsoft is thriving—our market performance, strategic positioning, and growth all point up and to the right,” he wrote.
“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 is being recognised and rewarded at levels never seen before. And yet, at the same time, we’ve undergone layoffs,” Nadella added.
He described the situation as “the enigma of success in an industry that has no franchise value.” He went on to say: “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 a greater impact than ever before.”
Nadella also stressed the importance of “unlearning” and “learning” as Microsoft adapts to new challenges and technologies. He reaffirmed the company’s commitment to its mission, priorities, and culture — referring to the importance of understanding the “why, what, and how” behind Microsoft’s direction.
Despite the optimistic tone of the memo, many former employees have shared feelings of disappointment and sadness over their layoffs, according to a report by CNBC. Some said they had thoroughly enjoyed working at Microsoft and felt disheartened by the decision.
Microsoft is currently the second most valuable publicly listed company in the world after Nvidia. Its Windows and Office products remain market leaders, and its Azure cloud division continues to experience rapid growth.
