Microsoft CEO Announces AI-First Hiring Strategy After Major Layoffs

Microsoft plans to hire more but with 'a lot more leverage' thanks to AI, CEO Satya Nadella says

Microsoft will expand its employee base once again, CEO Satya Nadella told investor Brad Gerstner on a podcast that aired on Friday. The software maker's workforce didn't budge in the 2025 fiscal year, which ended in June. It stood at 228,000, with multiple rounds of layoffs lowering the total number by at least 6,000. In July, Microsoft let go of another 9,000 workers. "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," Nadella said on the BG2 podcast. OpenAI, which has a broad partnership with Microsoft, introduced its ChatGPT assistant in 2022. Microsoft's headcount grew by 22% in the 2022 fiscal year. Employees will figure out how to do their jobs differently, Nadella said, adding that the company wants to ensure they can access artificial intelligence features in Microsoft 365 productivity software and the GitHub Copilot AI coding assistant. Those services draw on AI models from Anthropic and OpenAI. "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," he said. A similar adjustment played out at corporations decades ago, Nadella said. 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 said. This week, Amazon, which is racing against Microsoft to rent out cloud infrastructure for running AI models, cut 14,000 corporate employees. Amazon's senior vice president of people experience and technology, Beth Galetti, told workers in a memo that "this generation of AI is the most transformative technology we've seen since the Internet, and it's enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones)." On the podcast, Nadella talked about a Microsoft executive who deals with networking fiber. As the company ramped up data center operations to meet rising cloud demand, the executive realized she wouldn't be able to hire all the people she thought she needed, and so she built AI agents to handle maintenance, Nadella said. "That is an example of you, to your point, a team with AI tools being able to get more productivity," Nadella told Gerstner, who is founder and CEO of technology investment firm Altimeter Capital. On Wednesday, Microsoft reported 12% year-over-year revenue growth and showed the widest operating margin since 2002.

Nadella says Microsoft will hire again, but with an AI-first approach - The Economic Times

Microsoft CEO Satya Nadella said the company will increase its headcount, months after a barrage of tech layoffs globally, but the new hires will have to prove their artificial intelligence (AI) mettle. "We will grow our headcount, but the way I look at it is that headcount will grow with a lot more leverage than what we had pre-AI," Nadella said in a podcast released on Saturday, where he appeared alongside OpenAI CEO Sam Altman. He added that headcount growth will come after employees finish the "relearning and unlearning" process of how to work with AI tools for maximum productivity. The CEO gave the example of a network operations leader overseeing a massive 2-gigawatt data centre, who realised that hiring enough staff for global fibre maintenance was impossible, even if she had the budget. So, she automated the DevOps maintenance using AI-powered agents, which Nadella said was an example of how AI can enable a small team to efficiently manage operations at scale and boost productivity. Also Read: The OpenAI makeover: What it means for the ChatGPT parent & partner Microsoft This comes months after Microsoft announced laying off nearly 4% of its workforce, looking to rein in costs amid hefty investments in AI infrastructure. The company, which had about 2,28,000 employees worldwide as of June 2025, had announced layoffs in May, affecting around 6,000 workers. The company has pledged $80 billion this year to AI. But the rising cost of building AI systems is hurting profits, especially in the cloud business. Peers on layoff spree Tech giant Amazon earlier this month announced that it will cut up to 14,000 corporate roles, one of its biggest layoffs since 2022-2023, when it eliminated around 27,000 jobs. Despite the scale, this only impacts a fraction of its 1.55 million-strong global workforce. ET reported on October 29 that of this 14,000, the ecommerce and technology major could hand out pink slips to 800-1,000 corporate employees in India. As per reports, Google eliminated 200 roles in May across its global business unit, responsible for sales and partnerships.

Satya Nadella Announces Microsoft's AI-First Hiring Revival

After Major Layoffs, Microsoft CEO Satya Nadella Outlines an AI-Powered Growth Strategy After several rounds of Microsoft layoffs, CEO Satya Nadella says the company is preparing for a new phase of expansion powered by artificial intelligence. Speaking on a podcast hosted by Brad Gerstner, he shared, "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." His statement comes at a time when layoffs continue across the tech sector, with companies like and Salesforce cutting jobs as automation reshapes workflows. Microsoft itself laid off around 9,000 employees earlier this year, one of its largest rounds of job reductions.