“Microsoft is thriving,” said CEO and chairman Satya Nadella in a new statement following a round of layoffs earlier this month that cost 9000 employees their jobs.
The statement, shared publicly and with Microsoft employees, reiterates the company mission, with Nadella doubling down on the importance of AI.
First, he acknowledged the layoffs. “I want to express my sincere gratitude to those who have left,” he said. “Their contributions have shaped who we are as a company, helping build the foundation we stand on today. And for that, I am deeply grateful.”
He continued: “I also want to acknowledge the uncertainty and seeming incongruence of the times we’re in. By every objective measure, Microsoft is thriving – our market performance, strategic positioning, and growth all point up and to the right. We’re investing more in CapEx than ever before. Our overall headcount is relatively unchanged, and some of the talent and expertise in our industry and at Microsoft is being recognised and rewarded at levels never seen before. And yet, at the same time, we’ve undergone layoffs.
“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.”
It’s clear that AI is now at the heart of Microsoft, as Nadella stated its three business priorities are security, quality, and AI transformation. “We are doubling down on the fundamentals while continuing to define new frontiers in AI,” he said.
“What does empowerment look like in the era of AI? It’s not just about building tools for specific roles or tasks. It’s about building tools that empower everyone to create their own tools. That’s the shift we are driving – from a software factory to an intelligence engine empowering every person and organisation to build whatever they need to achieve.”
Discussing company culture, Nadella stated: “Growth mindset has served us well over the last decade – the everyday practice of being a learn-it-all, not a know-it-all. It has reshaped our culture and helped us lead with greater humility and empathy. We need to keep that.”
He continued: “It might feel messy at times, but transformation always is. Teams are reorganising. Scopes are expanding. New opportunities are everywhere. It reminds me of the early ’90s, when PCs and productivity software became standard in every home and every desk! That’s exactly where we are now with AI.
“Years from now, when you look back at your time here, I hope you’ll say: ‘That’s when I learned the most. That’s when I made my biggest impact. That’s when I was part of something transformational’.
“What we’ve learned over the past five decades is that success is not about longevity. It’s about relevance. Our future won’t be defined by what we’ve built before, but by what we empower others to build now.”
Nadella’s statement comes three weeks after over 9000 employees were laid off from the company, which Microsoft told Eurogamer was “necessary to position the company and teams for success in a dynamic marketplace”.
While the total number of laid off employees in gaming positions is unknown, the likes of Rare’s Everwild, The Initiative’s Perfect Dark reboot, and a new ZeniMaz MMORPG were cancelled.
Roughly 200 staff from Candy Crush developer King were laid off and have reportedly been replaced by the AI tools they helped to build. The team at Turn 10 Studios behind Forza Motorsport is also reportedly “no more”.
The knock-on effect has also resulted in funding being cut for Romero Games’ next project, though contrary to reports the studio has not closed.
“And, as even AI’s biggest proponents will usually admit, it is fundamentally incapable of actually learning anything,” wrote Eurogamer’s Chris Tapsell in response to the recent layoffs at Microsoft. “Creative industries such as video games are human ones, existing because of deeply human urges, irrepressible natures and drives. Drives which run in direct opposition to the horrifying inhumanity of the people who run them.”
