Microsoft has recently laid off more than 15,000 employees, a decision that has raised a lot of questions across the tech world. In a memo shared internally, CEO Satya Nadella opened up about the reasoning behind the cuts and what the future holds for the company. The tone of the message was direct and honest, reflecting the weight of the decisions being made at the highest level.
Let’s break down what happened, why it happened, and what this memo tells us about Microsoft’s next big move.
What’s Going On at Microsoft?
Microsoft is one of the largest and most profitable tech companies in the world. With strong earnings, a dominant presence in cloud services, and a growing investment in artificial intelligence (AI), the company appears to be thriving on paper. Yet, despite that success, thousands of roles have been cut.
Earlier this year, Microsoft started trimming roles in various departments including sales, support, cloud operations, and even in its gaming division. The July wave of layoffs affected around 9,000 people, following earlier job cuts in January. Altogether, the number now stands at over 15,000 layoffs in 2025 alone.
What Did the CEO Say?
In the memo sent to employees, Satya Nadella acknowledged how difficult and emotional these decisions have been. He described layoffs as “weighing heavily” on him and expressed gratitude to the employees who were let go. But he also pointed out that change is not always clean or comfortable—sometimes, it can feel messy.
Nadella spoke about the idea of “unlearning”—letting go of old methods and structures that no longer serve the company’s future. According to him, Microsoft is not just evolving from a software company to a cloud-based service provider; it’s now becoming what he called an “AI-first” company. This transformation, he explained, requires people to think differently, work differently, and sometimes make hard choices.
Why the Layoffs, Then?
At first glance, it may seem confusing. If Microsoft is doing so well financially, why cut so many jobs?
The company is in the middle of a major shift. It is investing heavily—tens of billions of dollars—in AI infrastructure, cloud data centers, and next-generation tools. This kind of transformation means reorganizing teams, eliminating overlapping roles, and tightening operations. The memo emphasized the need to be more agile and more focused.
In short, Microsoft is betting big on the future of AI. To make that bet work, it’s trimming down areas that don’t align directly with that strategy.
How Are Employees Affected?
For those impacted, the layoffs are understandably tough. Many had worked on projects for years and were caught off guard. While some received severance packages, the emotional toll and uncertainty are real.
For remaining employees, the environment has become more intense. Nadella’s memo asks them to stay focused, embrace learning, and help lead Microsoft through this transition. But the pressure to adapt quickly is certainly there.
The Bigger Picture
These layoffs highlight a trend we’re seeing across the tech industry. Even the most successful companies are realigning themselves for the next wave of technology—AI being at the center. That process often includes streamlining teams, shifting priorities, and yes, letting people go.
Microsoft’s CEO memo gives us a rare look at how these decisions are made internally. It’s not just about numbers. It’s about direction, transformation, and trying to lead in an unpredictable tech landscape.
Disclaimer
This article is intended for informational purposes only. It reflects publicly available information and interpretations from recent events at Microsoft. It does not represent insider views or official corporate statements beyond what has been publicly disclosed.
