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Microsoft CEO Satya Nadella speaks during an event commemorating the 50th anniversary of the company at Microsoft headquarters in Redmond, Washington, on April 4, 2025. Microsoft Corp., determined to hold its ground in artificial intelligence, will soon let consumers tailor the Copilot digital assistant to their own needs.
David Ryder | Bloomberg | Getty Images
Microsoft plans to strategically expand its workforce, leveraging AI for enhanced productivity, CEO Satya Nadella revealed in a recent podcast appearance. This announcement follows a period of workforce adjustments within the company.
While Microsoft’s headcount remained steady at 228,000 during the 2025 fiscal year, this stability followed multiple rounds of layoffs, impacting at least 6,000 employees earlier in the year and a subsequent reduction of approximately 9,000 workers in July. These moves were part of a broader restructuring aimed at optimizing resource allocation in a rapidly evolving technological landscape.
“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 stated on the podcast. He emphasized the company’s commitment to integrating artificial intelligence across various departments to amplify employee effectiveness, mirroring the transformative impact of OpenAI’s ChatGPT, with whom Microsoft has a strategic partnership.
The shift towards AI-driven workflows necessitates a period of adaptation for employees. Nadella envisions a future where individuals seamlessly integrate AI features available in Microsoft 365 productivity suite and the GitHub Copilot AI coding tool into their daily tasks. These tools are powered by sophisticated AI models from both Anthropic and OpenAI, further highlighting Microsoft’s dedication to democratizing access to AI technologies.
“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,” Nadella explained. He drew parallels to the introduction of email and Excel, highlighting how such tools eventually altered business processes and boosted productivity.
Nadella envisions a future where AI is at the core of every task. “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,” he said, underscoring the integration of AI into all facets of business operations.
Microsoft’s rival in the cloud computing arena, Amazon, recently announced a corporate employee reduction, as it and other tech companies race to enhance and optimize their cloud offerings for AI-powered workloads.
An internal communication from Amazon’s senior vice president of people experience and technology conveyed a sentiment echoing Nadella’s own, acknowledging AI as “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).” This statement underscores a broader industry-wide recognition of AI as a catalyst for innovation and efficiency gains.
Nadella highlighted a specific example of a Microsoft executive dealing with networking fiber. Faced with increasing data center demands, this executive incorporated AI agents to streamline maintenance tasks, showcasing the power of AI in boosting team effectiveness and augmenting human capabilities.
Microsoft’s recent financial performance reflects its position in the market. The company reported a 12% year-over-year revenue increase. The tech giant also saw the widest operating margin since 2002, evidence of its efficient application of capital and resources.
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