A day after US Vice President JD Vance slammed tech giant Microsoft for replacing American employees with H-1B visa holders, CEO Satya Nadella issued a memo addressing the layoffs, which said the “headcount” have remained “relatively unchanged”. He then went on to call it ‘enigma of success in an industry that has no franchise value.’
Acknowledging the “uncertainty and seeming incongruence”, Microsoft CEO Nadella wrote in the memo, “our overall headcount is relatively unchanged, and some of the talent and expertise in our industry and at Microsoft is being recognised and rewarded at levels never seen before. And yet, at the same time, we’ve undergone layoffs.”
While at least 2000 employees were fired under the pretext of underperformance, AI chimed in for the rest, among the 9000 so far. Nadella sent the note explaining the reason behind the mass job cuts, while making huge profits and signing million-dollar deals in the sphere of AI.
The belt-tightening stress contradicted Microsoft’s stock closing price that rose by 21% this year, crossing $500 for the first time on July 9. Microsoft’s net income is estimated to $75 billion over the last three fiscal quarters, with an additional spending of $80 billion on AI infrastructure. Microsoft is set to release the next round of the Q4FY25 earnings on July 30.
Microsoft layoffs ‘weighed heavily’
About the decision that “weighed heavily” on him, he described it as “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.”
He added, “Microsoft is thriving – our market performance, strategic positioning, and growth all point up and to the right.” He also revealed the increased investment in CapEx, “than ever before.” The note also highlighted Microsoft’s dynamic approach to scale the business while catering to changing customer needs, innovating the business model, and setting up “a new production function”.
A similar note was released in 2023 when Microsoft announced a series of mass layoffs shortly after the COVID-19 pandemic. Just recovering from a global crisis, the tech company drew massive flak for its failure to acknowledge the job cuts.
Microsoft’s H-1B visa demand
This comes after US Vice President JD Vance slammed “the big tech companies” who apply for overseas visas after “laying off 9000 workers”. He said, “That doesn’t totally make sense to me,” as Microsoft seemed to take advantage of the H-1B visa program.
Across many reports on social media, it has been alleged that Microsoft has submitted more than 6000 H-1B visa applications since October 2024 and laid off more than 220,000 employees over the past year.
There were laid-off H-1B visa workers who came forward and revealed that they were now being served notices from Homeland Security, way in advance of the 60-day grace period. Investors reacted to this situation and said, “Microsoft didn’t bring in new foreign workers after laying people off, they renewed visas for long-time employees who’ve been in the US…”
