Microsoft Chief Executive Officer Satya Nadella has said the company will expand its workforce again after a series of layoffs in the 2025 financial year, as competition intensifies in automation and generative AI.
Speaking on investor Brad Gerstner’s BG2 podcast on Friday (local time), Nadella said, “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.”
In the financial year ended June 2025, Microsoft’s workforce stood at 228,000, down by at least 6,000 after several rounds of layoffs, according to CNBC. The following month, Microsoft cut another 9,000 jobs.
How AI is changing Microsoft’s work culture
According to Nadella, Microsoft employees will “figure out how to do their jobs differently” as the company moves forward in a tough AI race with competitors such as Meta and Google.
“It’s the unlearning and learning process that I think will take the next year or so, then the headcount growth will come with max leverage,” Nadella said.
Microsoft maintains a strategic alliance with OpenAI, the creator of ChatGPT. According to Nadella, the company aims to provide every employee with access to artificial intelligence tools across Microsoft 365 applications and the GitHub Copilot coding assistant, both powered by models developed by OpenAI and Anthropic.
Satya Nadella on AI-driven corporate shift
Nadella described the ongoing transition as a natural evolution in workplace technology. “To prepare forecasts, inter-office memos would circulate across multiple sites by fax, and then came email and Excel spreadsheets,” he said.
“Right now, any planning, any execution, starts with AI. You research with AI, you think with AI, you share with your colleagues and what have you,” Nadella added.
Global tech layoffs and restructuring in 2025
Following the pandemic-era hiring boom, major tech firms have faced slower demand, rising input costs, and margin pressure. In 2025, global technology giants, including Amazon, Meta, Microsoft, and Google, announced large-scale layoffs as they restructured around artificial intelligence.
Amazon cut about 14,000 corporate roles, citing automation and efficiency goals, while Meta axed around 600 jobs in its AI labs after earlier rounds. Microsoft and Oracle also trimmed staff amid slowing growth and operational costs.
Overall, more than 100,000 tech jobs have been eliminated worldwide this year as firms pivot from expansion to AI-driven productivity, according to job tracker layoffs.fyi.
What this means for India’s tech workforce
In India, the shift has coincided with the rise of Global Capability Centres (GCCs), where multinational firms internalise tech functions to reduce dependency on outsourcing providers.
In 2025, major India IT firms also downsized significantly, with Tata Consultancy Services (TCS) alone cutting around 12,000 jobs, roughly 2 per cent of its workforce.