Microsoft CEO Satya Nadella admits ‘lack of empathy’ after layoffs and return-to-office push; tells employees ‘we will do better’

Microsoft CEO Satya Nadella has told employees that the company needs to “do better” in rebuilding trust with its workforce. The remarks come after months of layoffs and a new return-to-office rule that the company announced recently.

When an employee asked Nadella to speak about a perceived lack of empathy in the company’s culture, the Microsoft CEO said “I deeply appreciate that, the question and the sentiment behind it,” as per an audio obtained by CNBC. “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.”According to audio obtained by CNBC, HR chief Amy Coleman acknowledged mixed reactions to the return-to-office mandate during the session.

Some employees fear a loss of autonomy, though data shows staff around Seattle already average 2.4 days in the office each week.Nadella acknowledged that remote work can make mentorship harder for new employees and interns. “Management is just mostly all remote, but the interns are all, you know, in one location. And so those are things that just will break a social contract,” he said.

Satya Nadella warns staff of long-term challenges

Still, Nadella cautioned staff about long-term challenges. “Some of the biggest businesses we built may not be as relevant going forward,” he warned. “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?”“We have some very, very hard work ahead of us and that hard process of renewal is essentially what we have to do,” Nadella said.

“You have to be hardcore in terms of an intellectual honesty about what really needs to happen.”

Microsoft’s controversy over Azure and Gaza

The meeting also touched on fallout from a Guardian report alleging that Israel’s military used Microsoft’s Azure cloud to store Palestinians’ phone calls during the Gaza conflict. Microsoft has since fired five employees who protested against the company’s involvement.President Brad Smith addressed the issue, saying Microsoft will support Jewish employees who have faced harassment. “We don’t get to control what happens outside Microsoft, but we need to be clear about one thing,” Smith said. “There is no room for antisemitism at Microsoft, and as a company and as a community, we will protect this group and defend them from that.”