Microsoft Layoffs: Profits, CEOs, and a Culture of Fear?

This will be a rant, but a rant with roots in the belief that employee experience fosters customer experience.

As it should be well-known by now, Microsoft fired around 9,000 employees in July, after doing some smaller layoff rounds already in 2025, totaling more than 15,000 employees according to the TechCrunch comprehensive list of 2025 tech layoffs. This continues a trend from 2023 and 2024.

Now, I get it. Companies need to be and stay profitable, reorganize and, if needed, lay off employees. As such, there is nothing wrong with this.

Where things start to get wrong is when at the same time two other things can be observed: strong and successful growth in revenues as well as profits, and very generous payments to the C-suite.

Microsoft is immensely successful. For a long time now, we see record revenue and profits every quarter, which means strong growth. Looking at the most recent Q4/25 numbers, this is poised to continue and made Microsoft the second $4 trillion company after Nvidia.  

Consequently, Satya Nadella as the company CEO, receives an enormous total compensation ($ 79.1M in 2024). To compare this number, the average total compensation of a Microsoft employee is $220k with a median compensation of around $192k. This is a factor of 400. And no, this is not me being jealous.

Microsoft’s written down corporate values are respect, integrity, and accountability.

What triggered this text is the dissonance between all this that is also evident in Satya Nadella’s mail to the employees titled “Recommitting to our why, what, and how” that got published on the corporate blog on July 24, 2024. 

So, there are 9,000 people laid off – not let go, a term that Nadella luckily didn’t use this time – while the company and the C-suite enjoy record earnings. If I were one of these 9,000 people, reading this letter, reading about a “seeming incongruence” and about a decision “weighing heavy on me”, I would feel taken for a ride. 

There is no “seeming incongruence” but a real one. The incongruence is that top management is increasingly jaded and disconnected from where the success of the company is created: where the median compensation is about a quarter of a per cent of the CEO’s. Yet, these are the people who get sacrificed. Health insurance? Gone. Stock options? Gone. Future? Precarious.

The stock markets – or rather the investors – celebrated this layoff round as another success, bumping up the share price. And here is where the problem lies. The management is not answering to the employees but to investors who hunt short term profits. Employees appear on the liability side of the balance sheet, they are mere “resources”. Mind you, resources get consumed and then disposed of. That this is the thinking comes across in little things. “I want to express my sincere gratitude to those who have left.” Technically, they have left, but not voluntarily. Why not admit it? “Progress isn’t linear. It’s dynamic, sometimes dissonant, and always demanding. But it’s also a new opportunity for us to shape, lead through, and have greater impact than ever before.” Just that there are only few who really benefit from it. 

Let’s look a little further. 

The why

“When Microsoft is succeeding, the world around us must succeed too […] as a company it’s how we earn our social permission to operate.” This thinking is inside out. The success of Microsoft should rather be defined by making the world around successful. And Microsoft is undoubtedly successful. However, the success of the “world around us” is not a byproduct of a company’s success but its reason. The social permission to operate is given for its commitment to make the society it is embedded in more successful. I wish that more so-called leaders would accept that. How will the 8 billion people that Nadella talks of be able to “summon a researcher, an analyst or a coding agent at their fingertips” if they, increasingly get disenfranchised and cut of from the “success” of the few? 

The what

The priorities are clear: “security, quality, and AI transformation. […] Security and quality are non-negotiable”. And they are good. But are they followed through? You might remember the disastrous Storm-0558 security breach in 2023 and the 2024 report by the Cyber Safety Review Board. The CSRB “identified a series of Microsoft operational and strategic decisions that collectively pointed to a corporate culture that deprioritized enterprise security investments and rigorous risk management” (highlight by TW). After this incident, Nadella named security a priority. In 2025 we saw a major Sharepoint breach that lasted for two weeks before being disclosed and in between numerous other ones. Yes, Microsoft is probably in the crosshairs of many bad actors, but this string of breaches does not indicate security being a top priority. Who suffers from it? Customers. And employees. Executives? Not so much, although  a part of their performance-based pay is tied to cybersecurity performance and Nadella himself asked for a reduction of is incentive payout – which got agreed to – just that his payout got increased, too.

So, the priorities are clear – and who gets held accountable, too. And it is not the board …

The how

Culture is important. A growth mindset, too. Just that a growth mindset far too often correlates with an elbow mentality and egoism. The interesting part in this section of Nadellas letter is that there is no mention of the written down corporate values, which are respect, integrity, and accountability. Instead, he preaches competition and inside-out thinking “we can go win together, and change the world in the process” instead of winning because of changing the process. 

What all this creates is not a culture of “we” and collaboration, it is a culture of fear. Fear of one’s ideas being usurped by a manager or colleague and fear of being the next one to be axed.

I see a great company, great not because of its managers and executives, but because of its people. I also see a company that is its own worst enemy. Microsoft could do better – by living up to its values and not treating employees as resources. This is not integer, nor is it respectful. And on top of it, it would make employees more productive, as they do not need to worry about their future. Employee experience helps improving the customer experience.

End of rant.

What do you think?