Microsoft CEO says job cuts have been weighing on him, says AI transition could be “messy”

Microsoft CEO says AI-induced job cuts have been “weighing heavily” on him
Satya Nadella likens this period to the early 1990s, when PCs became democratized
Microsoft is set to announce quarterly revenue next week, so more cuts may be coming

In a company-wide memo to workers, Microsoft CEO Satya Nadella has said the company’s recent job “eliminations” have been “weighing heavily” on him.

Nadella explained he “acknowledge[s] the uncertainty and seeming incongruence of the times we’re in” – even though Microsoft is “thriving” and headcount remains largely unchanged, many thousands have still lost their jobs, largely due to AI-induced efficiency upgrades.

To justify the workforce changes, Nadella explained roles are being redefined due to evolving customer needs, and how users go about getting work done.

Satya Nadella understands workers are worried about their jobs

The news comes as the company’s capital expenditure continues to rise – Microsoft plans to spend about $80 billion on AI infrastructure alone in 2025 – and yet layoffs may only save a small portion of this spend.

However, recent cuts have triggered widespread employee discontent, fear and dropping morale, with many fearing that the company could return to ‘old Microsoft’ where internal rivalries, poor communication and job insecurity make it an unpleasant company to work for.

Around 9,000 Microsoft workers lost their jobs in July 2025, with around 6,000 also going in May and several hundred in other, smaller adjustments.

Likening the current situation to the early 1990s when PCs and productivity software became democratized, Nadella noted: “It might feel messy at times, but transformation always is. Teams are reorganizing. Scopes are expanding. New opportunities are everywhere.”

The CEO also expressed that progress isn’t always linear, and in this case, it could be dynamic, dissonant and demanding.

Nadella also committed to addressing employee concerns at the company’s next Town Hall meeting, as well as sharing more details in the earnings call, set for July 30.

Microsoft reportedly set to cut thousands of jobs, with sales roles particularly at risk
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Microsoft CEO says job cuts have been weighing on him, says AI transition could be “messy”