New Delhi: After a year of significant layoffs, Microsoft is set to grow its workforce again, now with an emphasis on artificial intelligence (AI). In a discussion on the BG2 podcast with investor Brad Gerstner, Microsoft CEO Satya Nadella indicated that the company will increase its employee count in a “smarter and more leveraged” manner, driven by AI technology. “We will grow our headcount,” Nadella stated, noting that upcoming hiring will be influenced by how AI enhances productivity throughout the company. As of June 2025, Microsoft had approximately 228,000 employees, a number that remained stable following multiple job cuts impacting over 15,000 workers. Before the AI surge in 2022, the company’s workforce had increased by 22 percent.
The slowdown in hiring was due to Microsoft’s strategic shift towards investing in AI infrastructure, partnerships, and tools, including Microsoft 365 Copilot and GitHub Copilot. Nadella described the current phase as one of “targeted scaling,” where AI enables smaller teams to accomplish significantly more. He referred to this shift as an “unlearning and learning process,” necessitating that employees adapt to integrating AI into all aspects of their work, from research and planning to execution. He cited an example of a Microsoft executive utilizing AI agents to oversee the company’s fiber-network operations when hiring could not keep pace with rising demand. “That’s an example of a smaller team achieving more because of AI,” Nadella remarked.
Earlier this year, reports indicated that Microsoft laid off about 4 percent of its workforce, approximately 9,000 employees, in another wave of layoffs. The Seattle Times reported in July that employees in Microsoft’s Xbox division, known as Microsoft Gaming, were particularly affected by these job cuts. Xbox leader Phil Spencer communicated to the team, “To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness.”
