Microsoft CEO Satya Nadella has confirmed that the tech giant is planning to expand its workforce again after a year of back-to-back layoffs. In a podcast episode with Brad Gerstner, boss of Altimeter Capital, Nadella stated that the next phase of growth will be driven by artificial intelligence (AI) and more operational efficiency.
‘We will grow our headcount, but…’
On the BG2 podcast with Gerstner, Nadella said, “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 employees will need to adapt to new ways of working as AI becomes central to Microsoft’s tools and workflows. He added that the company aims to equip its workforce with access to advanced AI features integrated into Microsoft 365 and the GitHub Copilot coding assistant – powered by models from OpenAI and Anthropic.
“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.
Microsoft continues to double down on artificial intelligence, with around 230,000 organisations using Copilot Studio and more than 14,000 customers connected to its Azure AI Foundry service.
Everything starts with AI, says Nadella
He further 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 also highlighted how email and Excel replaced faxed memos decades ago. He also pointed out how AI is boosting efficiency at Microsoft.
The 58-year-old gave an example of an executive overseeing the company’s fibre network who developed AI agents to automate maintenance tasks when expanding the data centre workforce wasn’t feasible.
“That is an example of you, to your point, a team with AI tools being able to get more productivity,” Nadella further said.
Layoffs at Microsoft
Microsoft’s headcount stood at about 228,000 at the end of the 2025 fiscal year in June, following several rounds of layoffs that eliminated at least 15,000 job roles. While around 6,000 employees were let go in May, followed by another 9,000 in July, across various divisions.
Data from Layoffs.fyi shows that 218 tech companies have laid off employees in 2025, leading to job losses for around 1.1 lakh tech employees.
Microsoft’s performance for the fiscal year ending June 30, 2025. It posted $281.7 billion in revenue and $101.8 billion in profit, driven largely by Azure, which grew 34 per cent year over year to exceed $75 billion. The tech giant now operates across 70 regions with more than 400 data centres worldwide.
