Following Microsoft’s newest mass layoffs that affected round 9,000 people–including dramatic cuts at Xbox–CEO Satya Nadella despatched a memo to employees that was shared on Microsoft’s blog. Within the memo to employees, Nadella addressed what he known as the “why, what, and the way” of the choice to chop so many roles.
Nadella mentioned the choices that led to the layoffs have been “among the many most troublesome we now have to make.”
“I need to categorical my honest gratitude to those that have left. Their contributions have formed who we’re as an organization, serving to construct the muse we stand on as we speak. And for that, I’m deeply grateful,” he mentioned.
Nadella additionally addressed what he known as the “seeming incongruence” of how Microsoft made these dramatic cuts at a time when enterprise is booming. Nadella mentioned Microsoft is “thriving” by “each goal measure,” however he chalked the layoffs as much as “the enigma of success.”
“Progress is not linear. It is dynamic, typically dissonant, and at all times demanding. But it surely’s additionally a brand new alternative for us to form, lead by, and have higher affect than ever earlier than,” he mentioned.
Additionally within the memo, Nadella mentioned when Invoice Gates based Microsoft many years in the past, he did so with the assumption that Microsoft may turn into a “software program manufacturing unit” that was “unconstrained by any single product or class.” That concept is “not sufficient,” Nadella mentioned, including that Microsoft must “reimagine” what its mission is. Microsoft is betting on AI, because it’s investing $80 billion into constructing out the know-how and planning to bake AI into each product it makes, together with Xbox.
“Simply think about if all 8 billion folks may summon a researcher, an analyst, or a coding agent at their fingertips, not simply to get data however use their experience to get issues completed that profit them. And take into account how organizations, empowered with AI, may unlock completely new ranges of agility and innovation by reworking decision-making, streamlining operations, and enabling each workforce to realize extra collectively than ever earlier than,” Nadella mentioned in his pitch for AI.
Going ahead, Nadella mentioned Microsoft will concentrate on three principal areas: safety, high quality, and “AI transformation.” For AI, Nadella mentioned Microsoft will “reimagine each layer of the tech stack,” together with the infrastructure, app platform, apps, and AI “brokers.”
“Our differentiation will come from how we carry these layers collectively to ship end-to-end experiences and merchandise, with the core ethos of a platform firm that fosters ecosystem alternative broadly. Getting each the product and platform proper for the AI wave is our North Star,” Nadella mentioned.
Relating to firm tradition, Nadella mentioned workforce buildings are altering, and issues may get messy. “It’d really feel messy at occasions, however transformation at all times is. Groups are reorganizing. Scopes are increasing. New alternatives are all over the place,” he mentioned.
The cuts at Xbox included layoffs, sport cancellations, and the closure of at the least one studio. It was later reported that builders on the Microsoft-owned Sweet Crush studio King mentioned they have been set to be replaced by the tools they helped build. For its half, Microsoft has mentioned it expects the rise of AI to result in job losses within the close to time period, however that the alternatives that AI presents outweigh the challenges.