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After several rounds of Microsoft layoffs, CEO Satya Nadella says the company is preparing for a new phase of expansion powered by artificial intelligence. Speaking on a podcast hosted by Brad Gerstner, he shared, “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.”
His statement comes at a time when layoffs continue across the tech sector, with companies like Amazon and Salesforce cutting jobs as automation reshapes workflows. Microsoft itself laid off around 9,000 employees earlier this year, one of its largest rounds of job reductions.
Nadella emphasized that the transition won’t happen overnight. “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.
His point reflects a broader mindset shift, hiring fewer people, but empowering them with AI tools that multiply productivity.
Nadella asserts that AI features built into Microsoft 365 and GitHub Copilot AI Coding Assistant functionalities will be incorporated into the workflows of future Microsoft workers. OpenAI and Anthropic's large language models are driving these innovations, and they are already proving beneficial in terms of task automation, insight generation, and enhanced cooperation among teams.
He also shared an internal example: “That is an example of you, to your point, a team with AI tools being able to get more productivity,” referring to a Microsoft executive who built AI agents to manage the company’s data center operations amid rising cloud demand.
While many companies are cutting costs, Microsoft is positioning AI as a long-term growth driver. Nadella compared today’s transformation to earlier shifts brought by technologies like fax, email, and Excel.
“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,” he said.
Nadella’s vision points toward a hybrid model of human expertise and AI augmentation. Employees will be expected to adapt quickly, leveraging tools that enhance efficiency rather than replace their roles.
Microsoft's vision indeed holds that the forthcoming hiring process will be based not so much on numbers but on skill sets, each worker being supported by AI as a powerful assistant.
By framing artificial intelligence as a concept of leverage rather than disruption, Microsoft is setting a benchmark for the future of intelligent working in the tech industry.
