Microsoft CEO Explains Layoffs Despite Big Profits in Staff Memo

In a candid internal memo to employees, Microsoft CEO Satya Nadella addressed the recent wave of layoffs within the company, despite the tech giant posting strong quarterly profits. The decision, which affects thousands of roles across departments including cloud services, engineering, and sales, has raised questions about the company's long-term strategy amid robust financial performance.

Nadella acknowledged the company’s solid earnings but emphasized the need to stay agile and aligned with “strategic priorities” in a rapidly evolving tech landscape. “We’re operating in a world of constant change, and our responsibility is to invest in the future while remaining grounded in fiscal discipline,” he wrote.

He pointed to Microsoft's ongoing focus on artificial intelligence, cloud optimization, and platform innovation as key areas where resources would be reallocated. “These changes, while difficult, are necessary to ensure we’re building a company that can lead and serve the future needs of our customers and partners.”

The memo also stressed that affected employees would receive comprehensive support, including severance packages, continued healthcare benefits, and outplacement services.

This move mirrors similar actions taken by other Big Tech firms that, despite healthy earnings, are trimming headcounts to streamline operations and invest heavily in emerging technologies like generative AI.