Following Microsoft's latest mass layoffs that affected around 9,000 people--including dramatic cuts at Xbox--CEO Satya Nadella sent a memo to staff that was shared on Microsoft's blog. In the memo to staff, Nadella addressed what he called the "why, what, and how" of the decision to cut so many jobs.
Nadella said the decisions that led to the layoffs were "among the most difficult we have to make."
"I want to express my sincere gratitude to those who have left. Their contributions have shaped who we are as a company, helping build the foundation we stand on today. And for that, I am deeply grateful," he said.
Nadella also addressed what he called the "seeming incongruence" of how Microsoft made these dramatic cuts at a time when business is booming. Nadella said Microsoft is "thriving" by "every objective measure," but he chalked the layoffs up to "the enigma of success."
"Progress isn't linear. It's dynamic, sometimes dissonant, and always demanding. But it's also a new opportunity for us to shape, lead through, and have greater impact than ever before," he said.
Also in the memo, Nadella said when Bill Gates founded Microsoft decades ago, he did so with the belief that Microsoft could become a "software factory" that was "unconstrained by any single product or category." That idea is "no longer enough," Nadella said, adding that Microsoft needs to "reimagine" what its mission is. Microsoft is betting on AI, as it's investing $80 billion into building out the technology and planning to bake AI into every product it makes, including Xbox.
"Just imagine if all 8 billion people could summon a researcher, an analyst, or a coding agent at their fingertips, not just to get information but use their expertise to get things done that benefit them. And consider how organizations, empowered with AI, could unlock entirely new levels of agility and innovation by transforming decision-making, streamlining operations, and enabling every team to achieve more together than ever before," Nadella said in his pitch for AI.
Going forward, Nadella said Microsoft will focus on three main areas: security, quality, and "AI transformation." For AI, Nadella said Microsoft will "reimagine every layer of the tech stack," including the infrastructure, app platform, apps, and AI "agents."
"Our differentiation will come from how we bring these layers together to deliver end-to-end experiences and products, with the core ethos of a platform company that fosters ecosystem opportunity broadly. Getting both the product and platform right for the AI wave is our North Star," Nadella said.
Regarding company culture, Nadella said team structures are changing, and things could get messy. "It might feel messy at times, but transformation always is. Teams are reorganizing. Scopes are expanding. New opportunities are everywhere," he said.
The cuts at Xbox included layoffs, game cancellations, and the closure of at least one studio. It was later reported that developers at the Microsoft-owned Candy Crush studio King said they were set to be replaced by the tools they helped build. For its part, Microsoft has said it expects the rise of AI to lead to job losses in the near term, but that the opportunities that AI presents outweigh the challenges.
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Nadella said the decisions that led to the layoffs were "among the most difficult we have to make."
"I want to express my sincere gratitude to those who have left. Their contributions have shaped who we are as a company, helping build the foundation we stand on today. And for that, I am deeply grateful," he said.
Nadella also addressed what he called the "seeming incongruence" of how Microsoft made these dramatic cuts at a time when business is booming. Nadella said Microsoft is "thriving" by "every objective measure," but he chalked the layoffs up to "the enigma of success."
"Progress isn't linear. It's dynamic, sometimes dissonant, and always demanding. But it's also a new opportunity for us to shape, lead through, and have greater impact than ever before," he said.
Also in the memo, Nadella said when Bill Gates founded Microsoft decades ago, he did so with the belief that Microsoft could become a "software factory" that was "unconstrained by any single product or category." That idea is "no longer enough," Nadella said, adding that Microsoft needs to "reimagine" what its mission is. Microsoft is betting on AI, as it's investing $80 billion into building out the technology and planning to bake AI into every product it makes, including Xbox.
"Just imagine if all 8 billion people could summon a researcher, an analyst, or a coding agent at their fingertips, not just to get information but use their expertise to get things done that benefit them. And consider how organizations, empowered with AI, could unlock entirely new levels of agility and innovation by transforming decision-making, streamlining operations, and enabling every team to achieve more together than ever before," Nadella said in his pitch for AI.
Going forward, Nadella said Microsoft will focus on three main areas: security, quality, and "AI transformation." For AI, Nadella said Microsoft will "reimagine every layer of the tech stack," including the infrastructure, app platform, apps, and AI "agents."
"Our differentiation will come from how we bring these layers together to deliver end-to-end experiences and products, with the core ethos of a platform company that fosters ecosystem opportunity broadly. Getting both the product and platform right for the AI wave is our North Star," Nadella said.
Regarding company culture, Nadella said team structures are changing, and things could get messy. "It might feel messy at times, but transformation always is. Teams are reorganizing. Scopes are expanding. New opportunities are everywhere," he said.
The cuts at Xbox included layoffs, game cancellations, and the closure of at least one studio. It was later reported that developers at the Microsoft-owned Candy Crush studio King said they were set to be replaced by the tools they helped build. For its part, Microsoft has said it expects the rise of AI to lead to job losses in the near term, but that the opportunities that AI presents outweigh the challenges.
Source