Microsoft axes 9,000 jobs — then tells staff to use AI to cope with the fallout

Microsoft recently laid off about 9,000 employees worldwide, even though the company is doing very well financially. The layoffs included game studios getting shut down and some game projects being canceled.

What made it worse was a suggestion from a Microsoft executive that laid-off employees could use AI tools to help them "cope" with the situation. Microsoft CEO Satya Nadella posted a blog titled “Recommitting to our why, what and how,” trying to explain the layoffs, as per the report by PC Gamer.

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Why Did Microsoft Lay Off So Many People?

Nadella admitted layoffs were “weighing heavily” on him, even while admitting that Microsoft is thriving with strong market growth and performance. He called this situation “the enigma of success” and claimed the tech world is always changing and not always logical.

He mentioned terms like “no franchise value,” “new business models,” and “new paradigms,” though he didn’t clearly explain what they meant. Nadella's message shifted to focusing heavily on artificial intelligence (AI), calling it central to Microsoft’s mission going forward, as stated in the report by PC Gamer.

Microsoft’s Big Focus on AI

He said Microsoft will help people create their own tools using AI, turning Microsoft into an “intelligence engine.” He claimed that AI will bring “local surplus” to every company and country, but didn’t clarify how that applies to the workers just laid off.

Nadella said Microsoft plans to “reimagine every layer of the tech stack for AI”, from infrastructure to apps. He believes Microsoft’s strength will come from connecting AI tools across all platforms to build better user experiences, as per the Yahoo Finance report.

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Nadella also talked about having a “growth mindset” and being a “learn-it-all” instead of a “know-it-all.” He compared AI’s current moment to the early 1990s when personal computers became widespread, saying it's another big shift. Nadella added that success isn’t about how long a company has existed, but about staying “relevant” in today’s world, as per the PC Gamer report.

The overall message seemed tone-deaf to many, especially since thousands just lost their jobs while Microsoft talks about an exciting future in AI. In the end, it’s clear Microsoft is betting big on AI, and the company wants to be a leader in shaping the future of tech through it, according to the report by Yahoo Finance.

FAQs

Q1. Why did Microsoft lay off 9,000 employees in 2025?
Microsoft laid off 9,000 employees to restructure the company and focus more on AI technology, despite strong financial performance.

Q2. How is Microsoft using AI after the layoffs?
Microsoft plans to use AI to build new tools and products and wants employees and customers to create their own AI-powered solutions.