Microsoft CEO Satya Nadella says the company is going all in on AI right after slashing 9000 jobs.
The July layoffs were part of a bigger shake-up. In total, Microsoft cut over 15,000 roles in 2025. The company says it’s not struggling, but shifting priorities. Billions are now being funneled into AI infrastructure, including massive data centers and Copilot tools.
In May, 6000 engineers and developers were let go. July focused on sales and support teams. Microsoft now relies more on third-party reps and AI tools that already write 30 percent of its code. This shift means fewer people needed across the board.
Nadella defends cuts and doubles down on AI
In a new company-wide memo made public by Business Insider, Nadella finally addressed the backlash. “These decisions are among the most difficult,” he wrote. He claimed the company’s headcount is “relatively unchanged,” even after cutting nearly 4 percent of its workforce.
No promises were made about future job security. Instead, Nadella told staff to embrace the chaos. “It might feel messy at times, but transformation always is,” he admitted. But he urged employees to see the upside: more speed, more scale, more impact. He painted a future where everyone has their own AI researcher or coding assistant on call.
Microsoft’s new marching orders are security, quality, and AI. Security is the top priority after a rough year of breaches. But AI is the future, according to Nadella, and it’s already changing how the company operates.
This isn’t just a Microsoft story. Gaming giants like Monolith and EA have made similar moves. Netmarble and Immutable replaced entire teams with AI art and writing tools. Even tech titans like Google, IBM, and Bumble are leaning on AI to cut costs and restructure.
Fans are frustrated, developers are anxious, and critics warn that AI-first strategies could kill creativity and crush morale.
Global Starlink outage disrupts Ukrainian front lines