Microsoft’s AI Push Triggers Major Restructuring, Not Performance-Driven Layoffs, Says Nadella

New Delhi — As Microsoft makes aggressive strides in the artificial intelligence space, the tech giant has laid off around 6,000 employees in what is being described internally as a "strategic restructuring," not a performance review.

CEO Satya Nadella, addressing internal teams earlier this week, stressed that the layoffs were part of a long-term organizational realignment meant to support Microsoft’s growing AI ecosystem. “This isn’t about how our teams have performed,” Nadella said, “but about how we’re reshaping the company to be at the forefront of the next wave of innovation.”

A Shift in Priorities, Not a Judgment on Talent

Sources close to the matter say that most of the affected roles were in legacy product divisions or were not directly tied to AI development. While difficult, Microsoft sees this as a necessary move to free up resources and accelerate progress in what is becoming the most competitive sector in tech.

Rather than shrinking, the company is shifting talent and capital toward new teams focused on AI infrastructure, large language model integration, and enterprise-grade AI services. Some of the displaced employees may even be offered reskilling or reallocation options in the coming weeks.

AI at the Heart of Microsoft’s Next Chapter

Microsoft has made it clear that it wants to lead the global AI race. With massive investments in OpenAI, integration of Copilot into its Office suite, and the transformation of its Azure platform to support AI-first computing, the company is pivoting its core strategy.

An internal source told Bizz Buzz: “AI is no longer just a feature; it’s the foundation. We’re rebuilding Microsoft around this principle, and the reorganization reflects that.”

Coding Careers Still Matter, Say Execs

While AI tools can now write and debug code, Microsoft's leadership has been vocal in countering the notion that software engineers are becoming obsolete. In fact, the company is still hiring heavily in AI product management, prompt engineering, and full-stack development roles that require both coding and AI skills.

Microsoft’s message is clear: AI will transform jobs, not eliminate the need for skilled human minds. Employees are being encouraged to upskill and adapt as part of the company’s broader workforce evolution.