Microsoft will grow headcount again but with ‘more leverage,’ CEO says

Microsoft CEO Satya Nadella will expand its employee base once again, he told investor Brad Gerstner in a podcast on Friday.

The software maker’s workforce remained unchanged for fiscal 2025, which ended in June. The number remained at 228,000, and the total number decreased by at least 6,000 due to numerous layoffs. In July, Microsoft laid off another 9,000 workers.

“I will say that we will grow our headcount, but from my perspective, the headcount that we grow will grow with much more force than the headcount we had before AI,” Nadella said. BG2 podcast. OpenAI, which has a broad partnership with Microsoft, introduced the ChatGPT assistant in 2022. Microsoft’s headcount increased by 22% in fiscal 2022.

Nadella said employees will figure out how to do their jobs differently, adding that the company wants to ensure they have access to artificial intelligence features in Microsoft 365 productivity software and GitHub Copilot AI coding assistant. These services leverage artificial intelligence models from Anthropic and OpenAI.

“I think this learning and learning process will continue over the next year or so, when the increase in headcount will come with maximum leverage,” he said.

Nadella said a similar arrangement occurred in companies decades ago. He said inter-office memos to prepare the estimates would be distributed to multiple sites via fax, followed by email and Excel spreadsheets.

Nadella said, “Right now, every planning, every application starts with artificial intelligence. You research with artificial intelligence, you think with artificial intelligence, you share with your colleagues and whatever you have.”

This week, AmazonIt laid off 14,000 corporate employees as it competed against Microsoft to rent cloud infrastructure to run AI models.

“This generation of AI is the most transformative technology we’ve seen since the internet, allowing companies to innovate faster than ever before—in existing market segments and entirely new market segments,” Beth Galetti, Amazon’s senior vice president of human experience and technology, said in a memo to employees.

In the podcast, Nadella mentioned a Microsoft executive interested in network fiber. As the company ramped up data center operations to meet growing cloud demand, Nadella said, the executive realized he couldn’t hire all the people he thought he needed, so he installed artificial intelligence agents to manage maintenance.

“This is an example of how a team with AI tools can achieve greater productivity,” said Gerstner, founder and CEO of technology investment firm Altimeter Capital.

Microsoft on Wednesday reported 12% year-over-year revenue growth, its widest operating margin since 2002.

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