Microsoft will expand its workforce again but there's a catch
02 Nov 2025

Microsoft is gearing up to expand its workforce again, but this time with a focus on artificial intelligence (AI), CEO Satya Nadella has announced.

The tech giant's employee base remained stagnant over the past year, standing at about 228,000 by the end of its 2025 fiscal year in June. This was after several rounds of layoffs that cut the total number by at least 6,000.

To note, another 9,000 roles were axed in July.

Strategic hiring powered by automation
Strategic expansion

In a recent podcast interview with investor Brad Gerstner, Nadella confirmed Microsoft's plans to increase its headcount. However, he stressed that this wouldn't mean a return to pre-AI practices.

The tech giant's future expansion will be more strategic and powered by automation.

"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," said Nadella on the BG2 podcast.

Embracing AI in workforce management
Productivity boost

Nadella emphasized the importance of AI in Microsoft's hiring strategy. He said employees will have to "unlearn and learn" as AI becomes an integral part of their daily tasks.

The tech giant plans to give workers access to tools like Microsoft 365's Copilot assistant and GitHub's AI coding helper, both powered by models from OpenAI and Anthropic.

This is all part of Microsoft's plan to make sure its workforce is more productive with these advanced technologies at their disposal.

Nadella's analogy on workplace evolution
Historical perspective

Nadella drew a parallel between the current shift and past workplace changes, such as the transition from faxes to emails and spreadsheets.

He said, "A similar adjustment played out at corporations decades ago."

The Microsoft CEO also highlighted how AI is now at the center of planning and execution in businesses.

Hire for impact, not numbers
AI integration

Nadella shared an example of a Microsoft executive who managed fiber networking. As cloud demand surged, she realized hiring a large team for maintenance wouldn't be feasible.

Instead, she created AI agents to do most of the work.

This story illustrates Microsoft's broader philosophy: hire for impact, not numbers.

The next phase of growth won't just be about increasing headcount but forming teams that think and solve problems with AI at their core.