After a year of widespread layoffs, Microsoft CEO Satya Nadella has revealed that the tech giant is preparing to expand its workforce once again — this time with a sharper focus on AI-driven productivity and efficiency.
Speaking on the BG2 podcast with investor Brad Gerstner, Nadella confirmed that Microsoft’s employee count will begin to rise again, but in a “smarter, more leveraged way” compared to the pre-AI era.
“We will grow our headcount,” Nadella said. “But that headcount will grow with a lot more leverage than what we had pre-AI.”
As of June 2025, Microsoft employed around 228,000 people, roughly the same as the previous year after several rounds of layoffs that affected more than 15,000 employees. The company had expanded hiring by 22% in 2022, but later slowed recruitment as it shifted focus toward artificial intelligence infrastructure, partnerships, and integration across its software ecosystem.
🔹 AI to Redefine Microsoft’s Workforce
Nadella described the ongoing transformation inside Microsoft as a process of “unlearning and learning,” where every employee is expected to adopt AI tools in their daily work.
“Right now, any planning, any execution, starts with AI,” he explained. “You research with AI, you think with AI, you collaborate with AI — everything begins there.”
Employees across departments are already leveraging Microsoft’s Copilot tools — including Microsoft 365 Copilot and GitHub Copilot, powered by OpenAI and Anthropic models — to boost productivity and streamline workflows.
He cited the example of a team managing Microsoft’s fiber-networking operations: facing hiring constraints amid growing cloud demand, they built AI agents to automate maintenance, enabling a smaller team to accomplish more.
“That’s what AI is about — amplifying human capability,” Nadella said.
🔹 A New Technological Inflection Point
Nadella compared the current AI transformation to the leap from fax to email decades ago.
“Just like spreadsheets and email redefined productivity in the 1980s and ’90s, AI is now setting a new baseline for how work gets done,” he noted.
In his view, AI is the 2020s equivalent of Excel — not a tool for a few, but the foundation for how every knowledge worker operates.
🔹 Contrasting Moves: Microsoft vs. Amazon
Microsoft’s AI-focused hiring shift comes as Amazon continues to streamline operations, recently cutting 14,000 corporate jobs. Amazon’s HR chief Beth Galetti called AI “the most transformative technology since the Internet,” underscoring how major tech companies are reorganizing to stay competitive in the AI economy.
While Amazon trims its workforce, Microsoft is investing in AI-augmented roles designed to multiply output rather than maintain existing capacity.
🔹 Strong Financials Back the Strategy
Microsoft’s latest quarterly results showed 12% year-over-year revenue growth and its highest operating margin since 2002 — giving the company the financial strength to scale AI initiatives and talent investments.
Nadella’s remarks suggest that 2025 could mark a turning point — shifting from the contraction of the last two years to a new phase of AI-powered expansion.
“It’s an unlearning and learning process that will take about a year,” Nadella said. “Then the headcount growth will come — with maximum leverage.”
In essence, Microsoft’s next wave of hires won’t just use AI — they’ll build, train, and think with it.
