Nearly one month after sweeping layoffs struck global tech brand Microsoft, Chairman and CEO Satya Nadella is breaking his silence.
On July 2, 2025, Microsoft and gaming subsidiary Xbox announced the termination of more than 9,000 human employees in a company-wide shift toward generative artificial intelligence (AI). All in all, Microsoft has laid off an estimated 15,000 workers worldwide since the start of the year. Additionally, Microsoft shuttered several smaller studios and halted notable projects, like the highly anticipated Perfect Dark reboot and Everwild, the latter of which had been in development for the better part of a decade.
In a new internal letter later shared on the Official Microsoft Blog, CEO Nadella said the layoffs are “among the most difficult we have to make,” and admitted they are “weighing heavily” on him. He continues: “I want to express my sincere gratitude to those who have left. Their contributions have shaped who we are as a company, helping build the foundation we stand on today. And for that, I am deeply grateful.”
Immediately after thanking former employees for their company contributions, Nadella insists Microsoft is “thriving—our market performance, strategic positioning, and growth all point up and to the right. 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.”
Nadella’s memo also addresses the “uncertainty and seeming incongruence of the times we’re in,” an apparent indirect acknowledgement of extensive layoffs juxtaposed with record-high profits. Microsoft stock recently reached new heights, the closing price surpassing $500 for the first time just one week after cuts began. Despite significant cuts to Microsoft’s gaming division, Xbox Game Studios grew 5% in Q3 2025, a development for which shareholders likely have subscription-based platform Xbox Game Pass and successful first-party titles to thank.
With a $3.8 trillion market cap, the multinational tech conglomerate could potentially reach a $4 trillion valuation. This benchmark would make Microsoft just the second brand to do so, after GPU manufacturer Nvidia.
CEO Nadella names three brand priorities — “security, quality, and AI transformation” — in his closing statements. “What we’ve learned over the past five decades is that success is not about longevity. It’s about relevance. Our future won’t be defined by what we’ve built before, but by what we empower others to build now.”
Neither Microsoft nor its executives have shied away from publicizing its pro-AI philosophy. The brand’s Earnings Release FY25 Q3 revealed third-quarter revenue of $70 billion and annual revenue of $270 billion — 13% and 14% year-on-year increases, respectively.
Microsoft will disclose Q4 earnings for the 2025 fiscal year on Wednesday, July 30.
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A lifelong gamer raised on classic titles like Crash Bandicoot, Spyro, and Croc, Stephanie brings her expertise of gaming and pop culture to deliver unique, refreshing views on the world of video games, complete with references to absurd and obscure media.
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