- Microsoft is making big money but still cutting jobs.
- CEO Satya Nadella says it’s part of a long-term shift to AI.
- Over 15,000 employees lost jobs in 2025 despite company growth.
In 2025, Microsoft is seeing some of its best financial numbers ever. Yet, at the same time, it has cut over 15,000 jobs worldwide. This situation has raised many questions from employees and the public alike. How can a company earn billions and still let thousands go?
Microsoft CEO Satya Nadella has now spoken up, aiming to explain this surprising move.
A Year of Big Profits and Big Changes
Microsoft earned nearly $75 billion in net income over the past three financial quarters. That’s more than many countries make in a year. Still, they laid off around 9,000 workers in July alone. In total, more than 15,000 employees have lost their jobs in 2025.
This means about 7% of Microsoft’s global team was affected. People from various departments—including engineering, marketing, sales, and gaming—have been impacted.
Despite this, the company’s focus remains on growth. They’re planning to invest $80 billion into artificial intelligence (AI) systems and infrastructure by the end of this year.
Why Layoffs When Business Is Booming?
Nadella described the current moment as a puzzle. In a message to staff, he admitted the company is performing extremely well in many ways. Sales are strong. Their brand is trusted. The future looks bright.
“And yet,” he wrote, “we’ve still had to say goodbye to colleagues.”
The CEO shared this message on Microsoft’s official blog. He said that real progress doesn’t always follow a straight line. Sometimes, companies must make hard choices even when things look good on paper.
He added that the tech industry is constantly changing. What worked yesterday might not work tomorrow.
Moving from Software to AI Powerhouse
Nadella explained that Microsoft is no longer just a company that makes software. It is becoming a leader in AI technology. He called this a major transformation.
To support this goal, the company has picked three top priorities:
- Security – Making sure systems are safe.
- Quality – Keeping products and services reliable.
- AI Growth – Expanding the company’s artificial intelligence tools and reach.
The first two goals, he said, are non-negotiable. That means they cannot be compromised.
Microsoft believes that by investing more in AI, they can build new tools and stay ahead of competition. But to do this, they need to spend more money on data centers, software, and partnerships.
That’s one reason behind the layoffs: to redirect money into areas the company sees as more critical for the future.
AI Is the New Focus
Microsoft is not alone in this shift. Tech companies everywhere are making AI their top priority. According to Fortune magazine, over 83,000 tech jobs have been cut in 2025 alone.
Microsoft is also deepening its partnership with OpenAI, the company behind ChatGPT. In fact, many of Microsoft’s own tools now use AI in a big way. One example is GitHub Copilot—a tool that helps write computer code using AI. It’s now creating about 30% of Microsoft’s internal code.
This shows how AI is becoming a central part of the company’s operations. It is not just something they sell—it’s also something they use.
Gaming and Other Teams Impacted
Many of the job losses happened in Microsoft’s gaming division. Teams working on Xbox projects, game studios, and even marketing were reduced.
The Seattle Times reported that these layoffs were part of Microsoft’s plan to move money away from less profitable areas and invest more in AI development. It’s not that gaming or sales are unimportant—but AI is where Microsoft sees the biggest future growth.
A Message to Former Employees
Nadella also used his memo to thank those who had been let go. He said their work helped shape Microsoft into the strong company it is today.
He acknowledged the difficulty of this moment. Losing a job, especially when the company is doing well, can feel confusing and unfair. But he encouraged all current and former employees to see this period as a time of learning and impact.
He closed the message by saying, “I hope when you look back on this time, you’ll say: That’s when I grew the most.”
Company Stock Soars
Despite the layoffs, investors remain very confident in Microsoft’s direction. Its stock price has risen 21% in 2025 so far. Shares recently crossed the $500 mark, reaching an all-time high.
This shows that while some employees and outside observers are critical of the layoffs, Wall Street believes Microsoft’s focus on AI is a smart business move.
Will There Be More Job Cuts?
In his message, Nadella didn’t make any promises that layoffs were over. He spoke honestly about the uncertain future. The tech world, he explained, is always evolving. Companies must adjust quickly to stay relevant.
His words were clear: more changes may come, and not everything will make perfect sense at the moment.
What This Means for Tech Workers
The message is bigger than just Microsoft. It signals a trend across the entire technology industry. AI is becoming the center of attention. As more companies build AI tools, the need for traditional roles is shrinking.
This doesn’t mean jobs are disappearing entirely—it means they’re changing. New roles in AI, machine learning, and data analysis are opening up. But those without updated skills may find themselves left behind.
Final Thoughts
Microsoft’s recent layoffs show a sharp shift in how big tech companies are planning their futures. Profits alone don’t protect jobs anymore. Companies now think long-term—choosing to invest in what will help them grow five or ten years from now.
For employees, this means being adaptable. Learning new skills, especially related to AI and digital systems, can make a big difference in job security.And for Microsoft, the gamble is clear: let go of some roles today to lead the AI revolution tomorrow.