Layoffs continue to ripple through the technology industry, affecting companies across the spectrum — from Big Tech giants to small startups, as job cuts become the new normal in the tech world. Yet, amid this wave of uncertainty, Microsoft is charting a different course.
Amidst layoffs, after months of restructuring and downsizing, CEO Satya Nadella has confirmed that the company is preparing to expand its workforce once again, this time with artificial intelligence at the core of its growth strategy.
Even as AI-driven automation fuels job cuts across the industry, Nadella suggests that Microsoft’s new hires will be more productive, efficient, and empowered by AI, marking the beginning of a new, tech-enabled phase in the company’s evolution.
“I will say we will grow our headcount, but the way I look at it is, that headcount we grow will grow with a lot more leverage than the headcount we had pre-AI,” Nadella spoke on a podcast hosted by Brad Gerstner, the founder and CEO of the tech investment company Altimeter Capital, on Friday, October 31.
Microsoft Layoffs
Microsoft ended its 2025 fiscal year in June with roughly 228,000 employees, about the same as a year earlier, despite multiple rounds of layoffs that cut over 15,000 positions across divisions. Following the launch of ChatGPT in 2022, Microsoft's workforce increased by 22% during that fiscal year. Nevertheless, in 2023, the company revealed plans to cut 10,000 jobs, with an additional 6,000 layoffs in May 2025 and another 300 in June 2025.
CEO Satya Nadella said these reductions were part of a strategic shift toward AI infrastructure, partnerships, and products such as Microsoft 365 Copilot and GitHub Copilot, powered by models from OpenAI and Anthropic. New hires will leverage these AI tools to find more efficient ways to perform their tasks, from productivity workflows in Microsoft 365 to coding with GitHub Copilot.
Recent Layoffs
Nadella’s remarks come in the wake of mass layoffs at tech giants like Amazon and Salesforce, highlighting the growing uncertainty in corporate America. These cuts have impacted offices worldwide, including significant operations in India. While many companies have avoided specifying reasons for workforce reductions, tech leaders and analysts increasingly point to artificial intelligence as a major factor shaping both hiring strategies and job cuts.
Layoff Reasons
While many large tech companies have avoided giving specific reasons for layoffs, experts increasingly point to artificial intelligence as a major factor shaping hiring and workforce reductions. Nadella, however, noted that corporations have historically made similar adjustments to adopt new technologies like fax, email, and Excel. He cited a Microsoft team using AI agents to maintain data center operations, showing how AI can significantly boost productivity.
