Amid growing chatter about tech layoffs, Microsoft CEO Satya Nadella signalled a fresh hiring phase, telling investor Brad Gerstner in a podcast aired Friday that the company plans to expand its workforce again.
Nadella’s comments come after a year of workforce stagnation for Microsoft. By the end of fiscal 2025 in June, the company’s headcount remained steady at around 228,000, following several layoff rounds that cut at least 6,000 roles. Another 9,000 employees were reportedly laid off in July, reflecting the tech giant’s ongoing restructuring efforts.
“I will say we will grow our headcount, but the way I look at it is that headcount we grow will grow with a lot more leverage than the headcount we had pre-AI,” Nadella shared on the BG2 podcast.
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OpenAI, a key Microsoft partner, launched ChatGPT in 2022, a milestone that coincided with Microsoft’s 22% workforce growth that same fiscal year. Nadella noted that AI is reshaping how employees work, emphasising the company’s focus on equipping its teams with tools like Microsoft 365’s AI features and GitHub’s Copilot assistant. Both platforms leverage advanced models from OpenAI and Anthropic to boost productivity and innovation across the organisation.
Nadella emphasised that the rise of AI will transform how employees approach their work. He said Microsoft is focused on giving its workforce seamless access to AI-powered tools such as Microsoft 365’s productivity features and GitHub’s Copilot coding assistant, both built on advanced models developed in collaboration with OpenAI and Anthropic.
“It’s the unlearning and learning process that I think will take the next year or so, then the headcount growth will come with max leverage,” he said.
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Microsoft CEO compared today’s AI-driven transition to earlier waves of technological change in the workplace. He recalled how, decades ago, companies shifted from sending forecasts and memos by fax to using email and Excel, a transformation that similarly redefined efficiency and collaboration across offices.
“Right now, any planning, any execution, starts with AI. You research with AI, you think with AI, you share with your colleagues and what have you,” Nadella said.
Nadella also shared an example from within Microsoft, describing how an executive overseeing networking infrastructure adapted to the surge in data centre expansion driven by cloud demand. Realising that hiring enough staff to manage operations wasn’t feasible, she instead developed AI-powered agents to automate maintenance tasks, a move Nadella said reflects how employees are rethinking problem-solving through AI.
“That is an example of you, to your point, a team with AI tools being able to get more productivity,” Nadella told Gerstner, founder and CEO of technology investment firm Altimeter Capital.