Microsoft CEO feels weighed down by job cuts
- Reference: 1753403045
- News link: https://www.theregister.co.uk/2025/07/25/microsoft_ceo_job_cuts/
- Source link:
Thanking terminated employees for their service, Nadella attempted to address the cognitive dissonance that follows from headcount trimming at a time of strong financial performance.
In Microsoft's fiscal 2024, which ended June 30 of last year, it [1]reported $245 billion in annual revenue, up 16 percent year-over-year, and over $109 billion in operating income, up 24 percent. Yet this calendar year, the software giant [2]has cut more than 15,000 jobs, including [3]9,000 in July .
[4]
"By every objective measure, Microsoft is thriving – our market performance, strategic positioning, and growth all point up and to the right," Nadella [5]said .
[6]
[7]
"We’re investing more in CapEx than ever before. Our overall headcount is relatively unchanged, and some of the talent and expertise in our industry and at Microsoft is being recognized and rewarded at levels never seen before. And yet, at the same time, we’ve undergone layoffs."
Nadella continued, "This is the enigma of success in an industry that has no franchise value."
[8]
We have no idea what Nadella – or perhaps Microsoft Copilot – is trying to say here. Industries don't have "franchise value," which describes estimated revenue from present and future business opportunities, including intangibles like customer loyalty and brand reputation.
But companies do. Microsoft, with its thriving Productivity and Business Processes, Intelligent Cloud, and More Personal Computing segments, certainly has franchise value. If Nadella is trying to suggest that layoffs and growing profit go together because Microsoft's business could disappear at any moment, because the company has no franchise value that keeps revenue flowing, that just doesn't make sense. Perhaps it's just an admission that nobody – including Microsoft – has really figured out how to make big money from AI, much less how to value potential future revenue.
The enigma here is why Microsoft feels the need to cut staff as it pours money into AI, given that it's not likely to save all that much from job cuts compared to its expected datacenter outlay.
[9]
At the start of this year, Microsoft said it would spend [10]$80 billion in capex to build out AI infrastructure. That's the equivalent of 533,333 employees – more than twice Microsoft's actual headcount of 228,000 – if expensed at a rate of $150,000 each.
[11]50 years ago, Gates and Allen made the deal that launched Microsoft
[12]A billion dollars' worth of Nvidia chips fell off a truck and found their way to China, report says
[13]White House bans 'woke' AI, but LLMs don't know the truth
[14]So much for watermarks: UnMarker tool nukes AI provenance tags
ZipRecruiter estimates that the average salary of a Microsoft employee is about [15]$115,000 annually . That's around $150,000 if you add about 30 percent of salary in benefits. So while cutting 15,000 jobs might save $2.25 billion annually based on the above assumptions – excluding severance costs – that's still a very small portion of the funds allotted for Microsoft's AI building spree this year.
We note that Nadella, with his [16]$79.1 million annual pay package in 2024, could be exchanged for about 527 employees at the above market rate.
Having failed to provide a clear answer about the need for layoffs, Nadella argued that Microsoft must redefine its mission because company co-founder Bill Gates' vision of "a software factory, unconstrained by any single product or category" is no longer enough.
Microsoft, Nadella wrote, must be reimagined as "an intelligence engine empowering every person and organization to build whatever they need to achieve."
"Just imagine if all 8 billion people could summon a researcher, an analyst, or a coding agent at their fingertips, not just to get information but use their expertise to get things done that benefit them," Nadella mused. "And consider how organizations, empowered with AI, could unlock entirely new levels of agility and innovation by transforming decision-making, streamlining operations, and enabling every team to achieve more together than ever before."
We're just guessing here, but given that [17]1 in 3 people lack clean drinking water – [18]a popular beverage at datacenters – a few billion among us probably have priorities other than kibitzing with Microsoft Copilot. As for those of us fortunate enough not to worry about such matters, interest in chatbot access probably takes a backseat behind having a job.
Microsoft clearly does consider AI to be a priority. In fact, it's one of three that Nadella cites: security, quality, and AI transformation.
In terms of security and quality, Microsoft's record speaks for itself. That leaves AI transformation.
Nadella may be uncomfortable with layoffs, but they're a convenient counterweight to suppress concerns among [19]investors and [20]financial analysts about lavish AI spending [21]on services that have yet to turn a profit .
Microsoft is scheduled to report its fiscal 2025 fourth quarter earnings next Wednesday. ®
Get our [22]Tech Resources
[1] https://www.microsoft.com/investor/reports/ar24/index.html
[2] https://www.theregister.com/2025/05/13/microsoft_layoff/
[3] https://www.theregister.com/2025/07/04/former_and_current_microsofties_react_layoffs/
[4] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/cxo&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2aIZNMNJAbqbT_UXxyh401QAAAJU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[5] https://blogs.microsoft.com/blog/2025/07/24/recommitting-to-our-why-what-and-how/
[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/cxo&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aIZNMNJAbqbT_UXxyh401QAAAJU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/cxo&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aIZNMNJAbqbT_UXxyh401QAAAJU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/cxo&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44aIZNMNJAbqbT_UXxyh401QAAAJU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[9] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/cxo&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33aIZNMNJAbqbT_UXxyh401QAAAJU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[10] https://www.theregister.com/2025/04/09/microsoft_puts_more_datacenter_builds/
[11] https://www.theregister.com/2025/07/24/50y_of_gates_allen_mits_basic/
[12] https://www.theregister.com/2025/07/24/nvidia_chips_china_whoops/
[13] https://www.theregister.com/2025/07/24/white_house_wants_no_woke_ai/
[14] https://www.theregister.com/2025/07/24/ai_watermarks_unmarker/
[15] https://www.ziprecruiter.com/Salaries/Microsoft-Salary
[16] https://www.reuters.com/technology/microsoft-ceo-nadellas-2024-pay-rose-63-79-mln-stock-awards-2024-10-24/
[17] https://www.who.int/news/item/18-06-2019-1-in-3-people-globally-do-not-have-access-to-safe-drinking-water-unicef-who
[18] https://utulsa.edu/news/data-centers-draining-resources-in-water-stressed-communities/
[19] https://www.reuters.com/technology/microsoft-beats-quarterly-revenue-estimates-2025-01-29/
[20] https://www.nasdaq.com/articles/microsoft-attracts-analysts-buy-ratings-despite-high-ai-capex-plans
[21] https://www.wheresyoured.at/wheres-the-money/
[22] https://whitepapers.theregister.com/
Re: It would be a very young and stupid person to go to work for one of these companies.
Headline should read "US job cuts" - Microsoft just announced a $3 billion expansion in India, and is bringing in employees to the US on H1-B visas.
They're cutting expensive American workers, which makes short term financial sense.
Re: It would be a very young and stupid person to go to work for one of these companies.
A 63% pay-rise will soothe that indigestion Satya.
Go-Pilot recommends more for 2025.
https://www.bbc.co.uk/news/articles/cwy1lkp71n2o.amp
Re: It would be a very young and stupid person to go to work for one of these companies.
Off-shored Tech and Customer Service jobs are the easiest to repatriate as don’t need factories built and component global supply chains altered. Just an office*
Suggest the Orange Shit-Gibbon places a 100% Services Tariff on the like of Microsoft, IBM, Amazon, Cognizent, Intel, Google, Cisco, Accenture etc proportionate to the unfair impact to US Workers of offshoring/outsourcing.
… it’s not all about Physical goods.
* plenty free in Washington and other DoGE job cut locations.
Re: (100%) Services Tariff
The EU called that (at 2.5%) a Digital Services Tax, and Donnie told them not to be so silly.
Icon for style of modern trade negotiations.
Re: (100%) Services Tariff
Well they were silly not to ask for 25% and then let Donald have a big announcement how he decimated that evil EU services tariff down to 2.5%.
Icon for the EU success of keeping tariffs at 15% instead of 30%....
Crocodile tears
General Haig, so it is reported, would weep over the Somme casualty lists. Didn't stop him sending wave after wave of the nation's finest men over the top into the machine-gun fire.
The pint is raised in rueful salute to all those Microsoft employees who have been sacrificed to the great AI South Sea Bubble -->
Re: Crocodile tears
Nadella says his employees can Foch off.
Re: Crocodile tears
No no, he really feels the weight of all that money that was showered over him thanks of the cuts. He's human, poor lad, it's an hard work sustatin all those dollars weight.
Re: Crocodile tears
I'm sure Satya will be just crying on the way to the bank to collect his multi million dollar bonus for "good management" at fiscal year end.
Anyone who ever had a heart...
If he was laid off or replaced by someone cheaper it may weigh heavier on his heart. I'm assuming corporate bosses have a heart.
Re: Anyone who ever had a heart...
Yeah, they have those anthracite hearts they give landlords.
Re: Anyone who ever had a heart...
My Obsidian Heart.
Oh, pobrecito!
::patpatpat:: Must be rough.
I'm sure you'll get over it with a good wallow in a tub full of thousand dollar bills.
Tough Choices, Weighing Heavily on Mr. Nadella
(Another) new hypercar versus a bigger yacht.
Re: Tough Choices, Weighing Heavily on Mr. Nadella
Microsoft CEO feels weighed down by job cuts [pay package]
Awwww, so saaaad
Awwww, guess he'll just have to roll around in his giant piles of cash while [poop]ing over everything Windows 10 was.
It's sad, when Nadella took over from Balmer I thought it was an improvement, and it was for a while, but now he's just completely gone down the AI shitehole, destroying every product they have.
He used to be my one example for 'See? Indian tech execs don't have to be complete nepotistic failures destroying the company for short term gains' but now whoops.
Re: Awwww, so saaaad
Should have been tossed over the Nokia/Windows Mobile farce.
Re: Awwww, so saaaad
Nadella is there for a simple reason. He has to do whatever shareholders ask him. Windows Mobile was killed because it required investments for a while to become a viable alternative, aka less dividends. Windows development was highly reduced for the same reason, and now Office is following - see Outlook turning into a web app run locally. Probably Word and Powerpoint will follow soon.
He also cut Edge development using Chromium - the mighty Microsoft can't build a browser engine (calling it "Chakra" is an hint about why they couldn't develop one....)
And then the push to the cloud, where they can lock-in customers in steady cash-flows, and where they can highly take advantage of open source to cut on investments. I do not know if Exchange and Sharepoint debacles are voluntary, to push more people to the cloud systems (which weren't affected...). That, or true idiocy, and abysmal management.
Now he feels compelled to waste lots of money on AI even if customers ARE NOT asking for it because that's where shareholders think they can make a lot of easy money.
The future of the company may be not so good? The competitive advantage is diminishing? Who cares, hoard the money, fire poeple, tomorrow is another day.
The AI priority is undercutting basic service to support andstability of global platforms.
When the daily Message is only AI is valued, you don't get your best and brightest invested in keeping the lights on for customers.
An article worth reading.
This was a fantastic read. I believe this man believes what he is saying. Interpretation is a different thing tho. It is right to question whether he is in touch with reality, but I'll say no, he's the CEO of Microsoft and all that means. He has people to look after. Some of those people get paid by share holders.
Unfortunately, doing what they have been doing is not only wrong and evil, but some would argue necessary for the company. My rebuttal would be that the CEO gets paid handsomely, he could just take a pay cut. Say... a dollar a year?
Then again, he may have had his hand forced by the mob crime lord in charge.
Shareholders pay no one.
They are only there to get paid.
Re: An article worth reading.
He is the same person that squandered up to $10bn on the fiasco that was Nokia/Windows Mobile … so yes a tenuous grasp on reality.
Re: An article worth reading.
It was Ballmer that bougth the Nokia business, but he was very quick to kill it before it could become viable. But see my post above. Nadella is there not to invest money in new products. Just lke Pichai's Google (and of course, IBM), they are there to milk the previous success, because that's what shareholders want from them.
He just can't stop banging on about AI can he? All he has talked about for the past 2-3 years.
How about using the money to keep people employed.
It's almost like AI isn't positioned to improve the lives of those 8 billion people.
> We note that Nadella, with his $79.1 million annual pay package in 2024, could be exchanged for about 527 employees ...
Or alternatively we could refuse the hostage exchange and let them cut off a few fingers and ears before we agree to swap him for a 1983 Yugo.
An excellent sentence
In terms of security and quality, Microsoft's record speaks for itself. That leaves AI transformation.
Additionally, I don't see the AI transformation at Microsoft improving the current miserable level of security and quality if their human workforce its going to be newly recruited in India and their job will be copying and pasting the bullshit produced by Copilot into existing source code that they have no previous knowledge or experience of.
Nadella cites: security, quality, and AI transformation.
Which option is the odd one out ?
With the company's recent less than exemplary record on security and quality, the option chosen is blatantly obvious.
It's all shit, Shit, SHIT, an anthem of enshittification !
what a
cock.
"Microsoft CEO Satya Nadella on Thursday told employees in a memo that the company's recent layoffs have been "weighing heavily on me." "
Not like you were loosing money or heading for bankruptcy. And you're a multimillion and I bet you fought with some over redundancy entitlement. So infact you give now shits and only care about the shareholders. Don't pretend you give a shit about the staff.
Bing bong
Would a Mr Satya Nadella, travelling on the B-Ark please go to the gate immediately.
Re: Bing bong
Priority Boarding and First Class suite.
Re: Bing bong
That is very unfair to many telephone sanitizers!
Poor Satya
I can't imagine how difficult these times must be for Satya Nadella. All the emotional burden of laying of people, competing in the AI-race and calming down all the concerns of foreign countries about Digital Sovereignty - all this hard work and little understanding from the employees and the world. I'm sure Pablo Escobar was haunted in the same way by all these demands to secure the business.
Re: Poor Satya
Poor Satya be buggered. He couldn't give a shit about the staff. Thank fuck I'm a Microshit-free zone these days.
Just taking a leaf from the flimflammer in chief.
Imagine...
"Just imagine if all 8 billion people could summon a researcher, an analyst, or a coding agent at their fingertips, not just to get information but use their expertise to get things done that benefit them,"
Shame that most won't be able to afford the computer to run it on given that they lost their job to an AI system. Our entire economy is predicated on the fact that people do work to buy things from other people who do work to make that thing. If people stop being able to buy things the whole thing collapses like a house of cards.
How do these ridiculous companies not see this? Or sadly maybe they do, and they don't give a fuck as long as number go up in the short term, and fuck the long term - that's someone else's problem.
"a software factory, unconstrained by any single product or category"
"an intelligence engine empowering every person and organization to build whatever they need to achieve."
Two alernatives. Which has sufficient meaning to be used to assess what's been achieved?
Nadella is simply relocating as much of Microsoft as he can to India, where they are hiring like it’s going out of fashion. Same thing is happening at Google.
As Mr. Spock would have said if operating as a CEO today
"You are and always will be..... a line on my excel spreadsheet"
I am pretty sure more thought, effort and soul searching went into figuring out the minimum pay out for each employee, how the rolled up total of payments effected the EBITDA, and how best to manage the remaining workers including strategy sessions on mitigating watercooler conversations, positioning the redundancies as a "Good thing"etc etc
IMHO, Microsoft is, has, and always will be a world class Marketing company leveraging its illegal (convicted but vacated) monopoly to sell its own implementation of others successful software and services.
Silent laugh
no shit,really
that is all deliberate
they should punish the masterminds that ordered that whole AI desaster
It would be a very young and stupid person to go to work for one of these companies.
Ones that don't look at history and don't understand CapEx and financial skulduggery.
But there are those that are venture vultures at heart and don't care about the actual business, just their chances at feeding at the beast.