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Microsoft CEO Satya Nadella explains layoffs in memo to employees: ‘Enigma of success’
Microsoft's stocks have also been on an upward trajectory, with the closing price hitting a record of over $500 for the first time on July 9.
Microsoft CEO Satya Nadella sent a memo to his employees on Thursday explaining why the company laid off thousands of staffers despite increased investments and recognition.
Microsoft has laid off more than 15,000 people so far this year. It also cut around 2,000 additional staff who were assessed as underperformers.
Over the last three fiscal quarters, Microsoft's net income has totalled around $75 billion, Business Insider reported. The company is also spending $80 billion on investments for artificial intelligence (AI) infrastructure.
Microsoft's stocks have also been on an upward trajectory, with the closing price hitting a record of over $500 for the first time on July 9.
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What did Satya Nadella say in layoff memo
"Before anything else, I want to speak to what's been weighing heavily on me and what I know many of you are thinking about: the recent job eliminations," Nadella wrote in a memo to his employees.
Satya Nadella went on to explain why, despite investing more than ever before and recognising at levels never seen before, Microsoft laid off employees.
"By every objective measure, Microsoft is thriving—our market performance, strategic positioning, and growth all point up and to the right," he said.
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"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 recognised and rewarded at levels never seen before. And yet, at the same time, we've undergone layoffs," Nadella added.
He further wrote, “This is the enigma of success in an industry that has no franchise value. Progress isn't linear. It's dynamic, sometimes dissonant, and always demanding. But it's also a new opportunity for us to shape, lead through, and have a greater impact than ever before.”
Nadella emphasised that Microsoft wants to achieve its success by its ability to undergo the difficult process of "unlearning" and "learning".
In his memo to the Microsoft employees, Nadella also mentioned the 'why, what, and how' of the company's mission, priorities, and culture.
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However, several employees have expressed disheartened feelings over their layoff from Microsoft, emphasising how they enjoyed working for the company, CNBC reported.
After Nvidia, Microsoft is the world's most valuable public company. Its Windows and Office franchises continue to be the dominant force in the market, and its Azure cloud services have also reportedly seen faster growth in recent years.
