REDMOND (Diya TV) — Microsoft CEO Satya Nadella told employees this week that the company must do more to rebuild trust with its workforce after layoffs and a new return-to-office policy sparked frustration among staff.
The comments came during an online employee meeting on Thursday, where workers raised concerns about a lack of empathy and culture shifts at the tech giant. Nadella acknowledged the criticism and pledged to improve communication and leadership.
“I take it as feedback for me and everyone in the leadership team, because at the end of the day, I think we can do better, and we will do better,” Nadella said, according to audio obtained by CNBC.
Microsoft has faced pushback since announcing it would cut 9,000 jobs in July, on top of earlier reductions. On Tuesday, the company said workers living near its Redmond, Washington, headquarters must come into the office three days a week starting in February. The mandate will roll out to other locations later.
Amy Coleman, Microsoft’s chief human resources officer, said employee reactions have been mixed. Some workers welcomed the policy, while others said they felt they were losing autonomy. Coleman noted that Seattle-area employees already average 2.4 days in the office each week.
Like many tech companies, Microsoft shifted to remote work during the COVID-19 pandemic. Employees relied heavily on Microsoft Teams for meetings and communication. But Nadella said younger workers and new hires often miss out on mentorship and apprenticeship opportunities when managers work remotely.
“Management is just mostly all remote, but the interns are all, you know, in one location,” Nadella said. “And so those are things that just will break a social contract.”
Amazon, one of Microsoft’s top rivals, already requires employees to be in the office five days a week. Microsoft has moved more slowly but now sees in-person work as key to maintaining culture and collaboration.
Despite the internal unrest, Microsoft’s financial performance remains strong. Shares are up nearly 20% this year, pushing its market value to $3.7 trillion, second only to Nvidia worldwide.
In July, Microsoft reported a 24% jump in net income to $27 billion. Revenue from its Azure cloud business grew 39% in the latest quarter, while its Windows and devices division rose just 2.5%.
Nadella said the company must stay realistic about shifting market dynamics. “Some of the biggest businesses we built may not be as relevant going forward,” he said. “Some of the margin that we love today may not be there tomorrow.”
He added that Microsoft must focus on innovation and adapt to artificial intelligence, even as AI raises concerns about automation and job displacement. “We have some very, very hard work ahead of us,” Nadella said.
Employees also raised questions about Microsoft’s role in global conflicts. The Guardian reported in August that Israel’s military used Microsoft’s Azure cloud service to store Palestinians’ phone calls during its invasion of Gaza.
Microsoft has fired five employees after protests at its Redmond headquarters. The activist group No Azure for Apartheid has criticized the company’s involvement.
Brad Smith, Microsoft’s president, addressed the issue at Thursday’s meeting. He said he and Coleman met with Jewish employees who had faced harassment and threats after their information was shared online.
“There is no room for antisemitism at Microsoft, and as a company and as a community, we will protect this group and defend them,” Smith said.
Microsoft celebrated its 50th anniversary in April. As it pushes forward, Nadella emphasized that the company must balance financial growth with employee trust and cultural renewal.
“Capital markets have one simple truth,” Nadella said. “There is no permission for any company to exist forever.”
