‘We will grow our headcount but…’, Microsoft to expand workforce, confirms Satya Nadella

After a year of layoffs and hiring freezes, Microsoft is gearing up to expand its workforce again. But this time, CEO Satya Nadella says growth will look very different.

Microsoft plans to grow its employee base again after a year of cuts, CEO Satya Nadella confirmed during an interview on investor Brad Gerstner’s BG2 podcast. The company ended its 2025 fiscal year with 228,000 employees, down by roughly 15,000 after multiple rounds of layoffs, including 9,000 in July.

“I will say we will grow our headcount,” Nadella said, “but that headcount will grow with a lot more leverage than we had pre-AI.” The Microsoft chief described this next phase as one of “unlearning and learning,” as employees adapt to new workflows built around AI tools like Microsoft 365 Copilot and GitHub Copilot, both powered by OpenAI and Anthropic models.

Nadella compared today’s transformation to the shift from fax and paper memos to email and Excel decades ago. “Right now, any planning, any execution, starts with AI,” he said. You research with AI, you think with AI, you share with your colleagues and what have you,” Nadella added.

The remarks come just days after Amazon, Microsoft’s biggest cloud rival, announced 14,000 job cuts. Amazon’s HR head Beth Galetti described AI as “the most transformative technology since the Internet.”

Microsoft, meanwhile, is enjoying momentum. The company posted 12% year-over-year revenue growth this week and its strongest operating margin since 2002 — proof that its AI investments are paying off as it prepares for a new phase of “smarter” expansion.