Satya Nadella acknowledges Microsoft layoffs, calls industry success ‘dissonant and demanding’

Nearly two weeks after Microsoft laid off up to 9,000 employees, CEO Satya Nadella has addressed the job cuts in a company-wide memo, acknowledging the anxiety and questions many within the company have been carrying.

“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 to Microsoft’s more than 200,000 employees. “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.”

While Nadella expressed appreciation for those impacted, he stopped short of ruling out further layoffs. In fact, he noted that the company’s overall headcount has remained “relatively unchanged,” despite the recent restructuring.

“I also want to acknowledge the uncertainty and seeming incongruence of the times we’re in,” he added. “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 is being recognised and rewarded at levels never seen before. And yet, at the same time, we’ve undergone layoffs.”

He framed this contradiction as part of the broader challenges of operating in a fast-moving sector. “This is the enigma of success in an industry that has no franchise value. Progress isn’t linear. It’s dynamic, sometimes dissonant, and always demanding.”

Beyond the layoffs, Nadella reaffirmed Microsoft’s broader mission, one driven by artificial intelligence. He urged staff to consider the possibilities of AI being accessible to all. “Imagine if all 8 billion people could summon a researcher, an analyst, or a coding agent,” he wrote. “This could unlock entirely new levels of agility and innovation.”

He also outlined Microsoft’s three key business priorities in the future: security, quality, and AI transformation. Microsoft had already made security its top priority last year, following a spate of security incidents. Nadella reiterated this focus: “Security and quality are non-negotiable. Our infrastructure and services are mission-critical for the world, and without them, we don’t have permission to move forward.”

However, internal unease remains. Some employees worry that continued restructuring may foster a culture of instability and fear. Nadella’s message sought to address that concern by invoking the company’s familiar internal mantra: a growth mindset.

“It might feel messy at times, but transformation always is,” he said. “Teams are reorganising. Scopes are expanding. New opportunities are everywhere.”