Following a wave of major job cuts, Microsoft CEO Satya Nadella has announced that the company plans to expand its workforce again — but this time through a more strategic and efficient approach shaped by the ongoing AI revolution. Speaking to investor Brad Gerstner on the B2G podcast, Nadella said Microsoft’s employee numbers will rise “in a smarter, more leveraged way,” emphasizing that future hiring will focus on maximizing productivity through the integration of artificial intelligence. “We will grow our headcount,” Nadella stated, “but that headcount will grow with a lot more leverage than what we had pre-AI.”
Nadella Justifies Microsoft Layoffs as Strategic Shift Toward AI-Driven Restructuring
Nadella’s remarks come in the wake of Microsoft’s reported layoffs of nearly 4,000 software engineering roles amid its broader adoption of AI technologies. According to Bloomberg, the company plans to eliminate approximately 6,000 jobs across divisions, with over 30% of the cuts concentrated in Washington state. Earlier in May, Nadella addressed employees following the announcement of these layoffs, clarifying that the move affected roughly 3% of Microsoft’s global workforce. He explained that the decision was driven by internal restructuring and evolving business priorities, not employee performance issues.
During a company-wide town hall, Nadella acknowledged the emotional toll of the layoffs but stressed their necessity in realigning teams toward AI-driven initiatives. He reiterated that the restructuring was a strategic response to technological transformation and shifting market demands rather than a reflection of workforce inadequacy.
Global Tech Giants Restructure Workforces Amid AI Shift and U.S. Policy Pressures
Microsoft’s actions reflect a broader trend across the global tech industry, where major corporations are reducing staff as they pivot toward AI-based efficiency. Amazon, for instance, has confirmed plans to cut around 14,000 corporate jobs, with total reductions expected to reach 30,000. Other major IT players such as TCS, Accenture, Salesforce, and Google have also undergone restructuring. Additionally, pressure from U.S. operations and concerns about President Donald Trump’s proposed hike in H-1B visa fees have added to the uncertainty. With automation and AI increasingly capable of replacing traditional roles, companies are rethinking workforce structures to balance innovation, cost-efficiency, and technological advancement.
Summary:
Microsoft CEO Satya Nadella announced plans to expand the workforce strategically after major layoffs, focusing on AI-driven efficiency. Following cuts of around 6,000 jobs, Nadella clarified they were part of restructuring, not performance issues. The move reflects a global trend, as tech giants like Amazon and Google also adjust to AI transformations.
