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- Some staff questioned Satya Nadella's memo on job cuts amid huge earnings.Microsoft has shed thousands of employees this year, even as it spends $80 billion on AI.Employees speculated about the memo's intent, and whether it presages more cuts.
Microsoft employees are reacting to a memo from CEO Satya Nadella that attempted to explain why the company has cut jobs while generating huge profits and spending billions on AI.
Microsoft has shed thousands of employees this year. Meanwhile, the company has earned $75 billion in profit over the past three fiscal quarters, and plans to spend $80 billion on AI infrastructure in 2025. The stock also hit a record earlier this month.
Nadella sent a memo to employees on Thursday describing this "seeming incongruence" as the "enigma of success." The company expects total headcount to remain roughly flat.
Inside Microsoft, some staff speculated about what may have driven Nadella to write the memo: Are more job cuts coming? Is he feeling guilty about earnings, which the company is due to report next week? Was this just a message to Wall Street?
Nadella knows employees are stressed out
Nadella wrote the letter because he knows employees are stressed about increased performance pressure, AI competition, and job cuts, a person familiar with the matter said. Microsoft's last big employee "Signals" survey came out before the recent job cuts, but the company still gauges employee sentiment through daily and weekly "pulse" surveys.
Microsoft has about 220,000 employees, so it's hard to externally gauge the sentiment across the workforce broadly.
"With a company our size, you can imagine we have a variety of reactions internally that range from positive to constructive," Microsoft spokesman Frank Shaw said. "Satya heard directly back from a number of employees who appreciated his leadership as well as the content and tone of his message."
Criticism from some workers
Reactions from some employees, shared directly with Business Insider and on an employee message board, provide a partial window into how Nadella's memo was received internally.
One employee told BI that they couldn't tell if the CEO was trying to mend feelings or prepare people for more pain.
Another said Microsoft was prioritizing KPIs over people. (KPIs, or key performance indicators, is a common way for businesses to measure how they're doing).
Handling jobs cuts is never easy, as ousted workers often feel aggrieved and remaining staff can be demoralized.
Still, another Microsoft staffer told BI that Nadella's memo was tone deaf. This person compared the company to a coal mine and said the CEO if focused on getting more coal and doesn't care how he gets it.
Blind suspicion
Some users in a Blind message board, which requires a Microsoft.com email address to sign up, blasted Nadella's message.
One user posted a parody of Nadella's letter, titled "A quick memo on your continued utility." This response exhibits signs of stress and anxious suspicion — some of the things the CEO was likely trying to address in his memo.
Pretending to speak as Nadella, this person said constant chaos, shifting teams, and cancelled projects are not a bug, but a feature designed to keep workers anxious, compliant, and too scared to question leadership decisions. The person also advised colleagues to say useful, or they risk being replaced.
Another post was an apparent critique of Nadella's email, attributed to Copilot, Microsoft's AI assistant. It argued that the rationale behind the layoffs was not fully explained, and didn't directly acknowledge the emotional toll of ongoing change or support mechanisms.
Another user on the Microsoft Blind message board speculated that Nadella was sending a signal to Wall Street. (This is a common technique for most public companies, which exist to serve shareholders, along with customers and employees).
Microsoft likely understood that the CEO memo would be leaked to BI, suggesting it was crafted as a reminder to investors that layoffs have been happening, there are more to come, business is strong, this person wrote.
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