Satya Nadella says Microsoft will increase headcount following major layoffs, but there is a rider

Following massive job cuts, Microsoft CEO Satya Nadella said that the tech giant plans to expand its workforce; however, the focus will now be on a more strategic and leveraged approach post-AI revolution.

Nadella told investor Brad Gerstner at the B2G podcast that the company’s employee numbers will grow again, but in a “smarter, more leveraged” way.

“We will grow our headcount,” Nadella said. “But the way I look at it is, that headcount will grow with a lot more leverage than what we had pre-AI.”

Microsoft layoffs

Nadella's comments follow the tech company's reported layoffs of nearly 4,000 software engineering roles amid the growing adoption of AI, according to a Bloomberg report. Microsoft plans to cut nearly 6,000 jobs across its divisions, with over 30% of the layoffs based in Washington.

In May this year, Satya Nadella addressed the company for the first time after announcing layoffs of roughly 6,000 employees, which account for about three per cent of the global workforce. He highlighted that this decision was part of a wider internal restructuring and did not indicate any issues with employee performance, Mint earlier reported.

During a company-wide town hall, Nadella addressed the staff, explaining that the layoffs were essential to realign teams with Microsoft’s shifting priorities, particularly its growing emphasis on artificial intelligence. He recognised the emotional impact of the decision but emphasised that it was motivated by strategic changes rather than issues with productivity or talent.

Notably, Microsoft is not the only company that has recently cut jobs. E-commerce giant Amazon earlier confirmed plans to cut nearly 14,000 corporate jobs, just months after Chief Executive Officer Andy Jassy warned that AI would reduce the company’s workforce. The company plans to cut 30,000 jobs in total, Reuters reported. TCS, Accenture, Microsoft, Salesforce and Google are among the IT and tech companies that have conducted restructuring.

IT and technology companies around the world are experiencing significant changes due to ongoing pressure from their US operations and recent worries about US President Donald Trump's proposed increase in H-1B visa fees, which could affect new applicants aiming to work in the United States.

Besides concerns over the US visa fee hike, jobs in the sector are reportedly at risk of being replaced by artificial intelligence, which some companies might prefer to use to increase productivity and efficiency rather than relying on the human workforce.