- By Supratik Das
- Sat, 26 Jul 2025 02:51 PM (IST)
- Source:JND
Microsoft layoffs: Microsoft CEO Satya Nadella spoke about the recent round of layoffs affecting more than 15,000 workers in 2025 as one of the toughest leadership decisions. In spite of the sweeping cuts, Nadella underscored that the company is resounding, fueled by strategic shifts in artificial intelligence, cloud computing, and enterprise technology. In an emotional letter to staff, Nadella wrote, "Before anything else, I want to address what's been on my mind, and what I know many of you are wondering about: the recent job eliminations. These are some of the toughest decisions we have to make."
Microsoft has undergone at least four major rounds of workforce reduction this year, cutting approximately 15,000 roles across several divisions. In early July alone, 9,000 jobs were eliminated, affecting Xbox sales and regional offices, including about 850 jobs in Washington state. These cuts notwithstanding, the company's worldwide headcount is effectively stable, as Microsoft continues to hire in key fields, specifically around AI and cloud infrastructure.
'The Enigma of Success': Microsoft's Balancing Act
Describing the paradox of cutting jobs while achieving record market performance, Nadella referred to the situation as an “enigma of success.” He emphasized that technology companies must constantly evolve to stay relevant and competitive in today’s dynamic environment. “We are no longer just a software factory. We’re becoming an intelligence engine, empowering every individual and organization to build whatever they need to achieve using AI,” he said.
Following its shift to AI-driven services, Microsoft has now made AI use a part of formal employee performance reviews. Julia Liuson, President of Microsoft's Developer Division, notified employees that employing AI tools such as Microsoft Copilot is "no longer optional — it's core to every role and every level." Internal talks are said to be ongoing to add AI usage metrics to employee reviews next year as the company encourages wider use of its AI platforms. Microsoft's most recent round of layoffs hit particularly at traditional sales jobs, which the company intends to discontinue in favor of more technical "solutions engineers." The new positions are meant to showcase AI-powered tools directly to customers, consistent with Microsoft's goal of "a Copilot on every device and across every role," according to Sales Chief Judson Althoff.
JD Vance Criticizes Microsoft's Hiring Practices
In contrast, US Vice President JD Vance has publicly chastised Microsoft for the mass layoffs of American employees while persistently applying for H1-B work visas. "I don't want to see companies lay off 9,000 American workers and then tell me that they can't find talent here. That's a bulls**t story," Vance declared, urging a re-examination of tech industry hiring practices. To get its workers ready for this changing world, Microsoft is encouraging its remaining staff to "invest in your own AI skilling." The company is providing internal training and resources to assist employees in moving into more AI-driven positions.
Microsoft has spent about USD 80 billion on AI infrastructure in FY25 as it looks to become "the Frontier AI firm." Microsoft is intent on infusing AI throughout its product stack, from Azure to Office to Windows. While the magnitude of the job cuts has caused anxiety, Microsoft's management is adamant that the changes form part of an inevitable transformation to succeed in the AI-first world. As AI becomes the core of all jobs and performance indicators, Microsoft's latest actions portend an even deeper restructuring of the contemporary workforce.