Microsoft CEO Satya Nadella to 15,000+ employees fired this year: "For that, I am ..."
Microsoft CEO Satya Nadella
delivered a sobering message to employees Wednesday as the company announced its fourth round of layoffs this year, eliminating 9,000 more positions and bringing total workforce reductions to over 15,000 this year.
"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. 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," Nadella wrote in an internal memo addressing the latest cuts affecting 4% of Microsoft's 228,000 global workforce.
The CEO continued: "I want to express my sincere gratitude to those who have left. Their contributions have shaped who we are as a company, helping build the foundation we stand on today. And for that, I am deeply grateful."
Microsoft cuts 15,000+ jobs across multiple divisions despite record profits
The year-long elimination spree began with performance-based cuts in earlier in the year, escalated with 6,000 layoffs in May targeting software engineers and project managers, continued with 300+ June reductions, and culminated in Wednesday's 9,000-person reduction. The gaming division suffered the heaviest losses, with over 3,000 positions eliminated since Microsoft's $69 billion Activision Blizzard acquisition closed in 2023.
High-profile casualties include The Initiative studio's complete closure, cancellation of anticipated titles Perfect Dark and Everwild, and 200 job cuts at King, maker of Candy Crush. Xbox CEO
Phil Spencer
told gaming employees the cuts would "position Gaming for enduring success" while acknowledging the timing during Microsoft's strongest gaming performance period.
Despite the workforce reductions, Microsoft reported $25.8 billion in quarterly net income with 18% year-over-year growth, maintaining its position among the S&P 500's most profitable companies.
AI revolution drives management restructuring as technology writes 30% of code
Nadella addressed the apparent contradiction between strong financial performance and mass layoffs, describing it as "the enigma of success in an industry that has no franchise value." The CEO emphasised Microsoft's transformation from a "software factory to an intelligence engine" while the company invests $80 billion in AI infrastructure this fiscal year.
The strategic shift reflects AI's growing role in Microsoft's operations, with artificial intelligence now writing up to 30% of code in some company projects. Microsoft has systematically targeted middle management layers to eliminate organizational barriers and increase decision-making speed, mirroring similar restructuring efforts by Amazon and Meta.
Affected employees receive comprehensive severage packages including healthcare coverage and job placement assistance, with priority consideration for other Microsoft positions. The restructuring aligns with Microsoft's new fiscal year launch, when the company traditionally announces major organisational changes.
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