Microsoft CEO Satya Nadella has said the company is looking to expand its employee headcount.
Speaking last week to investor Brad Gerstner on the BG2Pod podcast, Nadella explained that the expansion comes with a caveat.
“I will say we will grow our headcount, but the way I look at it is that the headcount we grow will come with a lot more leverage than the headcount we had pre-AI,”
he said.
Microsoft has shed tens of thousands of roles this year across multiple departments. However, the new hires are not intended as a one-to-one replacement.
Microsoft’s Rehiring Aims
The tech giant has been making dramatic changes to both its goals and operations since the onset of the AI revolution.
The company began 2025 with announcements of layoffs across its security, gaming, devices, and other business units.
It then continued with a performance-related reduction of 6,000 employees in May, followed by another 9,000 two months later.
Yet, the new hires mentioned are not immediately forthcoming, suggesting they are not intended to fill any gaps left by those departures.
Instead, Nadella said the focus is for employees to learn how to approach their work differently using AI features in Microsoft 365 productivity tools and the GitHub Copilot AI coding assistant.
Once this “unlearning and learning process” occurs over the next year or so, “headcount growth will come with maximum leverage,” he said.
This pause before ramping up hiring is not without precedent. After OpenAI, which has a partnership with Microsoft, introduced its ChatGPT assistant in 2022, Microsoft’s headcount grew by 22% in its 2022 fiscal year.
This strategy of assessing how the workforce adapts to AI—and how much efficiency can be gained through it—may determine how far headcount eventually needs to expand.
Last month, Microsoft reported better-than-expected earnings and reiterated its ambition to continue investing heavily in AI infrastructure. Operating at full capacity, the company is ensuring every investment in employees is essential.
Workforce Perception and Challenges
Although Microsoft remains one of the world’s leading companies—one many employees are proud to list on their résumé—recent developments may have made it a less attractive workplace.
In addition to widespread layoffs throughout 2025, Microsoft has also announced a stricter return-to-office policy.
Combined with growing speculation that an AI bubble may be forming, prospective employees might hesitate to join if they fear future cuts.
Yet, if Nadella’s strategy of combining human expertise with AI-driven productivity succeeds, it could serve as a model for how companies reimagine their workforces in the AI era.
