Microsoft will begin hiring again after several rounds of layoffs, with CEO Satya Nadella saying the company will now have more “leverage” due to artificial intelligence.
Microsoft laid off around 6,000 employees, or around 3% of its workforce, in May, and another 9,000 in July. The cuts affected workers across teams and global locations.
“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,” said Nadella on investor Brad Gerstner’s BG2 podcast.
The company is aiming for employees to relearn their work processes while making greater use of AI, according to Nadella.
“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.
Nadella said Microsoft will provide the AI features in its Microsoft 365 software to all employees, as well as OpenAI and GitHub’s GitHub Copilot AI coding assistant.
Other major technology companies have also pursued significant layoffs this year. Amazon said last week it would cut 14,000 employees, which CEO Jeff Bezos credited to excess layers of employees and management, and Meta fired 600 workers in its AI unit last month.
While Microsoft beat estimates on earnings last quarter, shares dropped last week as it reported a major increase in capital expenditure to support its cloud and AI services.
Microsoft’s (NASDAQ: MSFT) share price closed at US$517.81 on Friday, down from its previous close at $525.76. Its market capitalisation is $3.85 trillion.
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