Microsoft CEO Satya Nadella has clarified that the recent global layoffs affecting around 6,000 employees (3 per cent of the workforce) were due to restructuring efforts, not employee underperformance. During a company-wide town hall, Nadella said, “This was about reorganisation rather than performance,” pointing to Microsoft’s massive AI expansion and changing business priorities as the key drivers.
The company has committed to spending USD 80 billion this fiscal year to build AI infrastructure and speed up the deployment of Copilot AI tools across services. Engineering and product development teams were among the most affected, reflecting how AI is reshaping even core technical roles.
CPO: “Coding isn’t dead, it’s evolving”
Chief Product Officer Aparna Chennapragada countered growing concerns that AI is making coding skills obsolete. “I fundamentally disagree with the idea that coding is dead,” she said on a recent podcast. While acknowledging that AI now writes up to 30 per cent of internal Microsoft code, she emphasised this marks a shift, not the end of programming.
She likened the change to how developers moved from assembly and C to higher-level languages. In the AI era, engineers may become “software operators”, managing and fine-tuning AI-generated code, rather than writing it from scratch.
Project managers and coders: Roles will evolve
In Washington State alone, 40 per cent of the eliminated roles were software engineers, and 30 per cent were project managers, according to Bloomberg. Despite these cuts, Chennapragada stressed that project managers will play a new role, helping teams navigate AI-generated ideas through editing and prioritisation, rather than being phased out.
This restructuring highlights a major shift in the tech industry: AI won’t replace professionals, but it will redefine how they work.
Microsoft’s recent layoffs signal a pivotal moment in the tech industry’s transformation, driven by the rapid rise of artificial intelligence. While thousands of roles, especially in engineering and project management, have been impacted, the message from top leadership is clear: this is not the end of coding or traditional tech careers.