This month has been a roller-coaster at Microsoft — starting with thousands of layoffs and ending with blockbuster earnings. In a new message to employees, posted Wednesday afternoon on the company’s internal communications platform, CEO Satya Nadella struck a reflective tone, encouraging a long-term mindset.
The context: the 15th anniversary of Microsoft Azure. Once a distant challenger to Amazon Web Services, Azure has grown into a key pillar of the Redmond company’s business, generating $75 billion in annual revenue — more than a quarter of Microsoft’s total — as disclosed for the first time in Microsoft’s earnings release.
In the new message, obtained by GeekWire, Nadella explained that he has been “personally reflecting on our Azure journey, having been there since the early days.”
“We have come a long way since Project Red Dog!” he wrote, referring to Azure’s internal code name prior to its public unveiling. The message continued …
“I still remember what it felt like in the beginning. We were all in. We believed in the arc of technology. There were challenges, but we stayed the course, compounding small gains quarter-after-quarter and earning our customers’ trust—and here we are adding as much capacity in a month as we did in our first five years!”
“This is what’s required to make long-term progress: have a bold vision, complete the thought, and persist through all the ups and downs. And that is what makes Microsoft unique: our ability to think in decades and execute in quarters.
“That’s what great teams and great businesses do. And that’s what continues to drive us forward.
“So it’s worth each of us asking: What are you working on today that you have such conviction on, that 15 years from now you will look back and say, ‘We got it right!’?
“That’s the opportunity in front of us. Thank you for everything you do. I am grateful to be on the journey with you.”
In a separate memo last week, made public by the company at the time, Nadella addressed the juxtaposition between the company’s recent job cuts and soaring profits, referring to the situation as the “enigma of success.”
That message drew a wave of internal reaction — ranging from appreciation to skepticism and frustration — as Microsoft employees tried to reconcile the company’s financial strength with its workforce restructuring.
Between ongoing hiring and recent layoffs, the company is keeping overall headcount flat — around 228,000 employees globally, according to a new filing. Wall Street analysts praised Microsoft for its operating cost discipline.
At the same time, Microsoft is ramping up capital spending to unprecedented levels, planning a record $30 billion in the next quarter alone to expand its AI infrastructure — aiming in part to keep Azure strong for the next 15 years and beyond.
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