Satya Nadella seeks to reassure Microsoft employees in layoffs memo

Microsoft CEO Satya Nadella didn’t send a company-wide memo when the software maker laid off as many as 9,000 employees earlier this month. Now, Nadella is finally addressing what’s on many Microsoft employees’ minds: layoffs.

“I want to speak to what’s been weighing heavily on me, and what I know many of you are thinking about: the recent job eliminations,” says Nadella in a memo to all Microsoft employees today. “These decisions are among the most difficult we have to make. They affect people we’ve worked alongside, learned from, and shared countless moments with — our colleagues, teammates, and friends.”

While Nadella expresses gratitude for affected employees, he doesn’t guarantee there won’t be more waves of layoffs in the near future, and notes that Microsoft’s headcount is “relatively unchanged” despite the cuts:

I also want to acknowledge the uncertainty and seeming incongruence of the times we’re in. By every objective measure, Microsoft is thriving — our market performance, strategic positioning, and growth all point up and to the right. We’re investing more in CapEx than ever before. Our overall headcount is relatively unchanged, and some of the talent and expertise in our industry and at Microsoft is being recognized and rewarded at levels never seen before. And yet, at the same time, we’ve undergone layoffs.

This is the enigma of success in an industry that has no franchise value. 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.

After addressing the layoffs, Nadella also lays out Microsoft’s mission, priorities, and culture. The mission, as you might expect, revolves very much around the potential of AI. He asks more than 200,000 Microsoft employees to “imagine if all 8 billion people could summon a researcher, an analyst, or a coding agent,” and how this “could unlock entirely new levels of agility and innovation.”

Nadella also outlines three key business priorities: security, quality, and AI transformation. Security was made Microsoft’s number one priority last year, after a series of attacks and trust waning in Microsoft’s security efforts. Now, Nadella says Microsoft is “doubling down on the fundamentals” while also focusing on AI. “Security and quality are non-negotiable. Our infrastructure and services are mission critical for the world, and without them we don’t have permission to move forward,” says Nadella.

On the culture side, there are plenty of concerns from Microsoft employees that the continuous layoffs could create a culture of fear. Nadella now wants employees to keep the “growth mindset” culture in mind while the AI platform shift is reshaping Microsoft’s products and business models. “It might feel messy at times, but transformation always is,” says Nadella. “Teams are reorganizing. Scopes are expanding. New opportunities are everywhere.”