Microsoft layoffs: What CEO Satya Nadella told employees in town hall on layoffs that left 6,000 jobless

Microsoft Chief Executive Satya Nadella has spoken out for the first time following the company’s recent decision to cut approximately 6,000 jobs — about three per cent of its global workforce — emphasising that the move was part of a broader internal restructuring and not a reflection of employee performance.

Addressing staff during a companywide town hall meeting, Nadella said the layoffs were necessary to realign teams in accordance with Microsoft’s evolving priorities, particularly its growing focus on artificial intelligence. He acknowledged the emotional toll of the decision but underscored that it was driven by strategic shifts, not shortcomings in productivity or talent.

The job cuts have disproportionately affected engineering roles — a notable development given the traditional perception of these positions as secure. The move highlights a shift in the tech industry, where even product development teams are being reshaped amid the accelerating integration of AI technologies.

During the same internal event, executives highlighted Microsoft’s significant momentum in selling AI tools to enterprise customers. Chief Commercial Officer Judson Althoff revealed that British banking giant Barclays has committed to purchasing 100,000 licences for Microsoft Copilot — the company's flagship AI assistant. Althoff also noted that several major global firms, including Accenture, Toyota, Volkswagen, and Siemens, now each have over 100,000 users of Copilot within their organisations.

Nadella stressed the importance of tracking how deeply Copilot is embedded across client operations, with Microsoft paying close attention to the proportion of users actively engaging with the tool. At a list price of $30 per user per month, the scale of these contracts suggests annual revenues in the tens of millions of dollars — although actual figures are likely reduced by bulk pricing agreements.

The developments reflect Microsoft’s pivot toward enterprise AI as a key growth area, even as the company trims its workforce to maintain efficiency and focus.

(With inputs from Bloomberg)