Even as AI-fueled job cuts ripple across the tech industry, Microsoft appears to offer a silver lining. CEO Satya Nadella said that the Windows-maker has plans to expand its workforce again in the future. Except, these new hires will be more productive and efficient because of AI.
“I will say we will grow our headcount, but the way I look at it is, that headcount we grow will grow with a lot more leverage than the headcount we had pre-AI,” Nadella said in an appearance on a podcast hosted by Brad Gerstner, founder and CEO of technology investment firm Altimeter Capital, on Friday, October 31.
“It’s the unlearning and learning process that I think will take the next year or so, then the headcount growth will come with max leverage,” Nadella added.
According to the Indian-origin tech leader, new employees will be able to figure out how to do their jobs differently by accessing AI features in Microsoft 365 productivity software and the GitHub Copilot AI coding assistant. These features are currently powered by large language models (LLMs) developed by OpenAI and Anthropic.
Nadella’s remarks come on the heels of a recent outbreak of mass layoffs by tech giants such as Amazon and Salesforce. While these job cuts have jolted corporate America, there are signs that no one is safe right now, as most of these companies also operate large offices in countries like India and maintain a sizeable presence here.
Though many large tech companies have declined to provide specific reasons for job reductions, tech leaders and experts are increasingly citing artificial intelligence (AI) as a key factor in hiring and headcount reductions.
However, Nadella said that corporations had to make similar adjustments decades ago in order to adopt new technologies such as fax, email, and Excel spreadsheets. “Right now, any planning, any execution, starts with AI. You research with AI, you think with AI, you share with your colleagues and what have you,” he said.
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Citing an example of a Microsoft executive who built AI agents to handle the maintenance of the tech giant’s data centre operations amid rising cloud demand, Nadella said, “That is an example of you, to your point, a team with AI tools being able to get more productivity.”
Following the launch of ChatGPT in 2022, OpenAI investor Microsoft’s headcount grew by 22 per cent in that fiscal year. But in 2023, the tech giant announced that it would be letting go of 10,000 employees. In May this year, Microsoft laid off around 6,000 employees and axed another 300 jobs in June.
In July, the company said it would be reducing its global workforce by 4 per cent which would affect over 9,000 employees. On Wednesday, it reported 12 per cent year-over-year revenue growth and showed the widest operating margin since 2002.
