Microsoft Layoffs 15,000 in 2025 as Nadella Reflects on AI-Driven Reset

Picture Credit: Stanford Graduate School of Business

Microsoft has laid off over 15,000 employees so far in 2025, marking one of its most significant restructuring moves in recent years. The most recent round of cuts — approximately 9,000 jobs — was announced in early July, sending the company’s stock price soaring past $500 for the first time.

CEO Satya Nadella acknowledged the emotional and strategic weight of the layoffs in a heartfelt internal memo: “Before anything else, I want to speak to what’s been weighing heavily on me — the recent job eliminations.” He emphasized that while Microsoft’s headcount remains roughly flat compared to last year’s 228,000 employees, the cuts are part of a broader realignment for an AI-dominated future.

“This is the enigma of success in an industry that has no franchise value,” Nadella wrote. “Progress isn’t linear. It’s dynamic, sometimes dissonant, and always demanding.”

Microsoft’s layoffs reflect a wider trend in the tech sector, with more than 80,000 positions eliminated globally in 2025. Recruit Holdings, parent company of Indeed and Glassdoor, also cited artificial intelligence as a driving force behind recent cuts.

Despite the upheaval, Microsoft’s core businesses remain strong. The company is second only to Nvidia in market value, thanks to continued dominance in Windows, Office, and a booming Azure cloud business that supports AI giants like OpenAI.

In his memo, Nadella called for a new understanding of Microsoft’s mission in the AI era. “It’s about building tools that empower everyone to create their own tools,” he wrote, describing Microsoft’s evolution from a software company to an “intelligence engine.”

Microsoft is set to report its fiscal Q4 earnings on Wednesday, with investors watching closely for signs of how the restructuring and AI investments are paying off.