Satya Nadella reveals the real reason why Microsoft fired 6,000 employees, and it's not poor performance

India Today

2 days ago

Microsoft CEO Satya Nadella has finally broken his silence following the company's recent decision to cut around 6,000 jobs, roughly 3 per cent of its global workforce. But if you're assuming the layoffs were due to performance issues, Nadella clears the fact that this shake-up is all about strategy, and not shortcomings. Speaking at an internal town hall meeting, Nadella acknowledged the emotional toll of the layoffs, calling them a 'realignment' rather than a reflection of employee talent.advertisementIn the meeting he explained, 'This was not about people failing. It was about repositioning for what comes next.'. And what comes next is pretty predictable. In case you hadn't guessed, it is all about artificial intelligence. If you remember, a few years ago there was a boom in the tech industry, where companies were hiring software engineers left, right and centre. Not only were they well-paid, their jobs seemed pretty safe at that time. But little did they know, such high spirits were short-lived. Ever since AI came into the picture, tech companies have started laying off their employees, especially software engineers. And so is the case with Microsoft as it races to embed AI deeper into its products and services.
Even though engineers are losing their jobs every day now, Microsoft's chief product officer of experience and devices, Aparna Chennapragada, emphasised that learning to code is more valuable than ever, even if the way we code is changing. Although she acknowledged that roles are likely to evolve, hinting that future engineers could resemble 'software operators' more than classic developers, she rejected the notion that the fundamental principles of computer science will become obsolete.Microsoft's Copilot is flying highadvertisementStill, it's not all gloom and doom at Redmond HQ. Nadella used the same meeting to spotlight Microsoft's surging momentum in the AI space, particularly with enterprise clients. According to the reports, Chief Commercial Officer Judson Althoff offered a few standout names. Barclays, for instance, has signed on for 1,00,000 licences for Microsoft's flagship AI assistant, Copilot. Other global giants like Accenture, Siemens, Toyota, and Volkswagen have joined the Copilot club too, each with over 1,00,000 users, according to Microsoft. And if you're wondering what that means, it means that at a standard price of $30 (around Rs 2,600) per user per month, contracts of that scale could be raking in tens of millions of dollars annually. And it is a serious indicator of just how central Copilot has become to Microsoft's future.Nadella also noted that the company is keeping a close eye on how deeply Copilot is actually being used by its customers, not just how many licences are sold. 'Adoption is key,' he stressed. It's not enough for enterprises to buy in; they need to fully integrate Copilot into daily workflows to unlock its full potential (and justify the spend).All of this plays into a broader narrative that Microsoft is betting big on enterprise AI, even as it trims its workforce to stay agile and focused. The company wants to be leaner, sharper, and more AI-savvy. So, while the layoffs have left a sour taste for many, Microsoft's leadership insists the cuts are part of a forward-looking reset rather than a sign of retreat. For better or worse, the meeting concluded that in this AI-powered future, no role is sacred, but there's serious opportunity for those ready to ride the wave.