Microsoft plans to hire more but with 'a lot more leverage' thanks to AI, CEO Satya Nadella says

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

The software maker's workforce didn't budge in the 2025 fiscal year, which ended in June. It stood at 228,000, with multiple rounds of layoffs lowering the total number by at least 6,000. In July, Microsoft let go of another 9,000 workers.

"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 on the BG2 podcast. OpenAI, which has a broad partnership with Microsoft, introduced its ChatGPT assistant in 2022. Microsoft's headcount grew by 22% in the 2022 fiscal year.

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

"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," he said.

A similar adjustment played out at corporations decades ago, Nadella said. To prepare forecasts, inter-office memos would circulate across multiple sites by fax, and then came email and Excel spreadsheets, he said.

"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," Nadella said.

This week, Amazon, which is racing against Microsoft to rent out cloud infrastructure for running AI models, cut 14,000 corporate employees.

Amazon's senior vice president of people experience and technology, Beth Galetti, told workers in a memo that "this generation of AI is the most transformative technology we've seen since the Internet, and it's enabling companies to innovate much faster than ever before (in existing market segments and altogether new ones)."

On the podcast, Nadella talked about a Microsoft executive who deals with networking fiber. As the company ramped up data center operations to meet rising cloud demand, the executive realized she wouldn't be able to hire all the people she thought she needed, and so she built AI agents to handle maintenance, Nadella said.

"That is an example of you, to your point, a team with AI tools being able to get more productivity," Nadella told Gerstner, who is founder and CEO of technology investment firm Altimeter Capital.

On Wednesday, Microsoft reported 12% year-over-year revenue growth and showed the widest operating margin since 2002.

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