Microsoft Layoffs: Satya Nadella Admits 9,000 Jobs Cuts amid H‑1B Debate

Microsoft has laid off 9,000 employees globally in 2025, a restructuring that CEO Satya Nadella himself has admitted “weighed heavily” on him. Nadella’s response came after American Vice President JD Vance hit Microsoft for replacing American employees with H-1B visa holders.

In a memo addressing the layoffs, Nadella acknowledged the layoffs and the “uncertainty and seeming incongruence” but clarified that the company’s overall headcount is relatively unchanged. 

“Some of the talent and expertise in our industry and at Microsoft is being recognized and rewarded at levels never seen before. And yet, at the same time, we’ve undergone layoffs,” the Microsoft CEO wrote in the memo, as reported by CNBC.

Microsoft Layoffs 2025: A Year of Job Cuts & Restructuring

Microsoft layoffs began early in the year and intensified through mid‑2025:

Source: Business Insider, Bloomberg, CNBC & GreekWire

Nadella addressed employees in the memo, writing: “We’ve undergone layoffs….They affect people we’ve worked alongside, learned from, and shared countless moments with.”

He described the decision as “the most difficult we have to make,” framing it as a reallocation of talent rather than a retreat.

Why did Microsoft Layoffs Happen?

According to Nadella, many of these cuts are driven by AI automation and changing skill needs, not simply cost‑cutting. Around 2,000 roles were eliminated for underperformance, with the remainder part of a broad restructuring, as per the CNV report. Projects in gaming, including planned revivals like Perfect Dark, have been canceled, reflecting a shift in priorities, according to IGN.

Microsoft Layoffs’ connection with H‑1B Visa Debate

The timing of Microsoft layoffs has fueled a heated debate in U.S. politics. According to the U.S. Department of Labor data, Microsoft filed over 6,000 H‑1B applications since October 2024, many of which are renewals for existing staff. H‑1B visas allow companies to hire highly skilled foreign workers for specialized roles.

But the U.S. Vice President JD Vance questioned the practice saying: “That doesn’t totally make sense to me… companies laying off 9,000 workers while saying they can’t find workers in America.” 

On social platforms, some laid‑off H‑1B workers said they received early termination notices from Homeland Security, well before the usual 60‑day grace period. In response, Microsoft told Reuters on July 22 that the visa applications were “overwhelmingly renewals for long‑term employees,” not new hires brought in to replace U.S. staff.

What About Microsoft Employees in India?

Microsoft employs about 228,000 people globally, according to the company’s 2024 Annual Report, and nearly 20,000 in India as per Microsoft India Careers’ 2025 data. Reports in the Economic Times and Mint suggest India has been largely insulated from the layoffs thanks to Microsoft’s $3 billion AI and cloud investment in the country announced earlier this year in March. Engineering and technical roles in India still remain core to Microsoft’s plans.

Why are Microsoft Layoffs Surprising?

What makes Microsoft layoffs more striking is the company’s exceptionally strong financial performance. Its net income over the last three fiscal quarters totaled $75 billion with $80 billion spent on AI infrastructure. Microsoft’s market cap is nearing the $4 trillion mark.

CEO Satya Nadella put it in his memo saying, “Microsoft is thriving — our market performance, strategic positioning, and growth all point up and to the right.” Yet, even with these numbers, the company is streamlining aggressively to position itself as an “intelligence engine” for the AI era.

The Road Ahead for Microsoft

Microsoft is set to release its quarterly earnings on July 30, 2025. Both Investors and employees will be watching to see if these painful cuts, and the political scrutiny over H-1B visas translate into lasting growth for the tech giant.

For now, Microsoft’s restructuring highlights a difficult reality in the tech space that even amid record profits, companies may lay off a large chunk of their workforces to stay ahead in the next wave of innovation.

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