Microsoft focuses on rebuilding trust among employees after mass firings, return to office mandate
Microsoft CEO Satya Nadella has acknowledged that the company needs to rebuild the trust of its employees following recent layoffs and a mandate for a partial return to the office. During an online meeting, an employee expressed concern about a perceived lack of empathy in the company culture. Nadella responded by acknowledging the comments and promising improvements. This was reported by CNBC.
The move comes after Microsoft laid off 9,000 employees in July, in addition to other smaller rounds of layoffs. The company also announced that employees living near headquarters will be required to work in the office three days a week from February.
Amy Coleman, Microsoft’s head of human resources, acknowledged that the return-to-office policy had received mixed reactions, with some employees feeling a loss of autonomy. However, she pointed out that employees in the Seattle area are already working in the office an average of 2.4 days per week.
Microsoft embraced remote work during the pandemic and made extensive use of the Teams platform, and has been slower than other tech giants in implementing a back-to-office policy. Amazon, for example, began calling its employees back to the office five days a week as early as last January.
Despite internal criticism, Microsoft’s performance has been well received by Wall Street. The company’s shares have risen nearly 20% this year, outperforming the rest of the market and pushing its market capitalisation to $3.7 trillion (€3.15 trillion). This makes Microsoft the second most valuable company in the world, behind Nvidia.
In July, Microsoft reported a 24% increase in net profit to $27 billion (€23 billion), with a gross margin of nearly 69%. The company is investing heavily in data centre infrastructure to meet the growing demand for artificial intelligence.
Nadella highlighted the challenges of remote work for new and early-career employees, emphasising the importance of mentorship and learning opportunities.
He acknowledged that Microsoft is under pressure as the industry grapples with the potential impact of AI on jobs. Nadella stressed the need for “intellectual honesty” and a willingness to adapt to the changing realities of the market.
Microsoft’s Azure cloud business grew significantly (39%) in the last quarter, while revenue from Windows and devices saw a more modest 2.5% increase. Nadella acknowledged that some of Microsoft’s core businesses could become less relevant in the future and that margins could shrink. He emphasised the need to anticipate these changes and stay ahead of them.
The meeting also addressed controversial issues, such as Israel’s use of Azure infrastructure to store Palestinian phone data during the invasion of Gaza.
Microsoft chairman Brad Smith condemned antisemitism within the company and pledged to protect Jewish employees who have faced online harassment and threats.
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