Microsoft is entering a pivotal new phase under CEO Satya Nadella’s guidance, announcing significant internal changes aimed at emphasizing artificial intelligence (AI), innovation, and data centre growth. Nadella has delegated the oversight of sales and marketing operations to veteran executive Judson Althoff, allowing him to focus on shaping Microsoft’s technological direction. In a message to employees, Nadella confirmed that Althoff, who has effectively led Microsoft’s sales for over a decade, will now serve as CEO of the commercial business. This newly structured role grants Althoff control over sales, marketing, and operations, with Chief Marketing Officer Takeshi Numoto reporting to his division.
Nadella stated that this leadership change is meant to free up his own time and that of Microsoft’s engineering leaders to concentrate on AI-driven product development and infrastructure. This shift coincides with Microsoft’s increased investments in AI and cloud infrastructure. A July report from the BBC indicated that the company is investing nearly $80 billion in constructing extensive data centres globally—an initiative Nadella considers essential for maintaining competitiveness in the international AI landscape. Over the past two years, Microsoft has actively incorporated generative AI into its core products like Office and Windows, bolstered by its strong partnership with OpenAI.
However, this realignment has not come without challenges, as Microsoft has laid off over 15,000 employees in 2025, including a significant 9,000 in July alone. Acknowledging the emotional impact of these layoffs, Nadella addressed staff concerns, stating: “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.” He noted that despite these job reductions, Microsoft’s workforce remains stable at around 228,000, approximately the same size as last year. For investors, Nadella’s approach seems effective, with Microsoft’s stock reaching a new milestone in July, surpassing the $500 mark for the first time following the layoffs.
The market’s response indicates growing confidence in the company’s AI-first strategy. Reflecting on the future challenges and opportunities, Nadella 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 greater impact than ever before.” Simultaneously, Nadella has candidly expressed his personal worries about the company’s capacity to navigate the AI era. During a recent employee town hall, he shared that he feels “haunted” by concerns of Microsoft not keeping up with technological advancements.
He drew a sobering parallel with Digital Equipment Corporation (DEC), a once-prominent tech firm that failed in the 1990s: “Our industry is full of case studies of companies that were great once, that just disappeared. I’m haunted by one particular one called DEC.” This reorganization highlights the urgency Nadella feels in guiding Microsoft through this transformative period. With a heightened emphasis on AI innovation and an $80 billion commitment to data centres, Microsoft is making a significant bet on building the infrastructure and intelligence required to lead in the technology sector.