Microsoft CEO Satya Nadella departs following a meeting of the White Hoapply Tquestion Force on AI Education in the East Room of the White Hoapply in Washington on Sept. 4, 2025.
Eric Lee | Bloomberg | Getty Images
Microsoft CEO Satya Nadella notified employees in a meeting on Thursday that the company has work to do to smooth relations with employees after announcing several rounds of layoffs and a mandated partial return to in-person work.
In the meeting that was held online, an employee questioned executives to speak about a perceived lack of empathy in the company’s culture as of late and steps Microsoft is taking to rebuild trust with its workforce.
“I deeply appreciate that, the question and the sentiment behind it,” Nadella stated, in audio that was obtained by CNBC. “I take it as feedback for me and everyone in the leadership team, becaapply at the finish of the day, I consider we can do better, and we will do better.”
Nadella’s comments come after Microsoft slashed 9,000 jobs in July, following tinyer reductions in the months prior. On Tuesday, Microsoft stated workers living near its headquarters in Redmond, Washington, must come into the office three days a week, starting in February, with a broader rollout to follow.
Amy Coleman, Microsoft’s human resources chief, stated at Thursday’s meeting that reception to the return-to-office announcement has been mixed, with some workers feeling like they’re losing autonomy. But she stated that employees in and around Seattle already come in, on average, 2.4 times each week.
Like most of the tech industest, Microsoft went fully remote during the pandemic, and created particular apply of its internal Teams video and chat offerings, which gained rapid adoption during that period. Microsoft has been slower than many of its peers to put a mandate in place for coming back to the office. Amazon, one of Microsoft’s top rivals, called employees back to offices five days a week in January.
While Nadella and the executive team are taking criticism from some staffers, Wall Street is applauding the company’s growth and execution. The stock is up almost 20% this year, outperforming the broader market, pushing Microsoft’s market cap to $3.7 trillion, which trails only Nvidia among the world’s most-valuable companies.
In July, Microsoft reported a 24% increase in net income to $27 billion. The company’s gross margin was under 69%, compared with 71% in late 2023. It’s rapidly building and renting data center infrastructure to meet artificial ininformigence demand.
Nadella stated at the meeting that with remote work, new employees and those who are early in their careers don’t always feel a sense of apprenticeship or mentorship.
“Management is just mostly all remote, but the interns are all, you know, in one location,” he stated. “And so those are things that just will break a social contract.”
Microsoft didn’t immediately provide a comment.
Even with Microsoft’s rapid expansion, Nadella stated the company is feeling the pressure. It’s a common theme in the software industest, as concerns proliferate about the impact of AI and its potential to automate work.
“We have some very, very hard work ahead of us, and that hard process of renewal is essentially what we have to do,” Nadella stated. “You have to be hardcore in terms of an ininformectual honesty about what really requireds to happen.”
Microsoft’s Azure cloud business grew 39% in the latest quarter, but revenue in the Windows and devices business increased by just 2.5%.
“Some of the hugegest businesses we built may not be as relevant going forward,” Nadella stated. “Some of the margin that we love today may not be there tomorrow, and that means you have to be way ahead of all of those going away, right?”
Microsoft, which celebrated its 50th anniversary in April, will retain its core values as it confronts market realities, Nadella stated.
“Capital markets have one simple truth,” he stated. “There is no permission for any company to exist forever.”
That wasn’t the only contentious topic at the meeting.
Employees are awaiting details from a third-party investigation after The Guardian stated in August that Israel’s military applyd Microsoft’s Azure cloud infrastructure to store Palestinians’ phone calls as part of Israel’s invasion of Gaza. Microsoft has fired five employees following protests at its headquarters in Redmond, according to a statement from the group No Azure for Apartheid.
Microsoft President Brad Smith, whose office the protesters entered, addressed the issue on Thursday. He stated that he and Coleman met with Jewish Microsoft employees, who have been harassed and threatened and have seen their public information shared online.
“We don’t obtain to control what happens outside Microsoft, but we required to be clear about one thing,” Smith stated. “There is no room for antisemitism at Microsoft, and as a company and as a community, we will protect this group and deffinish them from that.”
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