Microsoft (MSFT) plans to increase its workforce again after a year of job cuts and flat hiring. Chief Executive Officer Satya Nadella said on a podcast that aired Friday that the company will start adding jobs once employees complete a period of “unlearning” and “relearning” their work using new AI tools.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
The company ended its 2025 fiscal year in June with about 228,000 workers, roughly the same as a year earlier. However, more than 6,000 employees were cut during that time, and another 9,000 left in July. Nadella said that once the company adjusts to using AI across its operations, headcount growth will return.
Meanwhile, MSFT shares declined 1.51% on Friday, closing at $517.81.
A Shift in How Employees Work
According to Nadella, employees are now using tools such as Microsoft 365 Copilot and GitHub Copilot to handle tasks more efficiently. These systems draw on models from OpenAI (PC:OPAIQ) and Anthropic (PC:ANTPQ). He said the next year will focus on helping staff adopt these tools and reshape how they complete daily tasks.
Nadella compared this period to the change that came when email and Excel first entered offices. He said that planning and collaboration now start with AI, and that workers will learn how to use it to research, write, and share ideas. He noted that one Microsoft executive used AI agents to help maintain the company’s fiber network, which cut the need for extra hires.
Balancing Growth and Productivity
Nadella explained that future hiring will bring “more leverage” than before, meaning Microsoft aims to add people only where AI cannot take over routine work. The goal is to grow output faster than costs by blending human skills with machine support.
At the same time, Microsoft’s competitors are taking different paths. Amazon (AMZN) cut 14,000 corporate jobs this week as part of a larger move to streamline operations while investing in AI. In a memo, Amazon’s senior vice president of people experience and technology said this new wave of AI is as transformative as the early Internet.
Financial Backdrop
Microsoft reported 12% year-over-year revenue growth last week, along with its widest operating margin since 2002. The strong results give the company room to invest in talent while continuing to expand its AI business through cloud services such as Azure. In short, Microsoft’s workforce is shifting from recovery to renewal. The next phase, Nadella said, will focus on scaling back up, with AI built into nearly every role.
Is Microsoft Stock a Buy, Sell, or Hold?
On the Street, Microsoft continues to hold analysts’ support with a Strong Buy consensus. The average MSFT stock price target is $632.78, implying a 22.20% upside from the current price.
