Microsoft wants to go through an “AI transformation” after laying off 9000 employees

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Microsoft CEO Satya Nadella says the company is going all in on AI right after slashing 9000 jobs.

The job cuts in July were simply a part of a larger reorganization effort. In the year 2025, Microsoft decided to eliminate more than 15,000 positions across the company. Despite this, they insist that they’re not facing financial difficulties, but rather readjusting their focus. Instead, vast amounts of resources are being directed towards building AI infrastructure, which encompasses huge data centers and innovative Copilot tools.

In May, approximately 6000 engineering and development positions were terminated. The company’s focus in July shifted towards sales and support teams. Now, Microsoft is leaning more on external representatives and AI tools that currently generate around 30% of its coding. This change signifies a reduction in the need for personnel across all departments.

Nadella defends cuts and doubles down on AI

According to a recently published memo from Business Insider, Nadella has spoken out about the criticism the company has been facing. In the memo, he stated that making these decisions is extremely challenging. Despite reducing almost 4% of its workforce, Nadella asserted that the company’s overall staffing levels have essentially remained the same.

As a devoted follower, I can confirm that there’s no assurance about job security down the line. However, Nadella encouraged us to embrace the turbulence ahead. He candidly acknowledged that change often brings a sense of disorder, but transformation inevitably does. Yet, he urged us not to overlook the benefits: increased speed, expanded reach, and amplified influence. He painted a captivating picture of a future where each of us would have an AI researcher or coding assistant at our beck and call, ready to assist whenever needed.

Microsoft’s latest directives emphasize three key areas: security, quality, and artificial intelligence (AI). Given the challenging past year marked by numerous data breaches, security has taken precedence. However, Nadella underscores that AI is the way forward, and it’s already transforming how the company conducts its business.

It’s not just a tale about Microsoft; major gaming companies such as Monolith and EA have taken similar steps. Notably, Netmarble and Immutable have switched entire teams to use AI tools for art and writing. Even tech giants like Google, IBM, and Bumble are increasingly relying on AI to reduce expenses and undergo structural changes.

People are growing discontented, creators are feeling uneasy, and commentators foretell potential harm: an exclusive focus on AI might stifle creativity and dampen spirits.

However, if Microsoft acquires Activision, Mojang, Bethesda, and other companies, this shift extends far beyond Redmond. If the investment proves successful, Microsoft might reshape contemporary work. Conversely, it could forfeit talent, credibility, and control over tools that it previously played a significant role in developing.

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2025-07-24 23:18