Microsoft CEO Satya Nadella is delivering a stark message to his top executives: sign on to the company’s artificial intelligence transformation or leave, according to internal documents and employee interviews obtained by Business Insider. The ultimatum comes as Nadella views AI as both an existential threat and Microsoft’s biggest opportunity in decades, with the CEO personally conducting conversations with senior leaders about their willingness to embrace the intense workload ahead.“Satya is pushing on intensity and urgency,” one Microsoft executive told Business Insider, adding that the pressure is forcing some Microsoft veterans to decide whether they want to stay and commit to the mountain of work required. “You’ve gotta be asking yourself how much longer you want to do this,” the executive added. People familiar with the matter said Nadella is having direct conversations with executives to secure their commitment to the transformation or facilitate their departure.
Microsoft CEO shifts focus to technical leadership and AI innovation
The AI push has triggered major organisational changes across Microsoft. Nadella recently promoted Judson Althoff to CEO of the company’s commercial business, explicitly to free up the CEO’s time for “laser focus” on technical work including datacenter buildout, systems architecture, and AI product innovation, according to an internal memo viewed by Business Insider. This marked a significant shift, with Althoff delivering the keynote at Microsoft’s recent Ignite conference—the first time in Nadella’s tenure that the CEO didn’t take the spotlight.Business Insider reports that Nadella has also launched weekly AI accelerator meetings featuring lower-level technical employees rather than executives, deliberately creating what insiders describe as a “messy and chaotic” environment designed to avoid top-down leadership. In a Teams channel for corporate vice presidents and above, Nadella wrote that leaders must “work and act like ICs in our own orgs,” referring to Individual Contributors focused on technical work rather than people management.“I chuckle a bit each time someone sends me a note about talking to a friend at an AI start-up, about how differently they’re working, how agile, focused, fast they are,” Nadella wrote. “The reality is that this work is also happening right here at Microsoft under our noses!”
Executive departures loom at Microsoft
More executive changes appear imminent. Three Microsoft executives told Business Insider that longtime Office and Windows chief Rajesh Jha has been considering retirement, though his decision remains uncertain given renewed excitement about AI’s potential. If Jha departs, LinkedIn CEO Ryan Roslansky is viewed as a potential successor. Microsoft recently expanded Roslansky’s role to include Outlook, Word, Excel, PowerPoint, and the Microsoft 365 Copilot application, with him now reporting to both Jha and Nadella.Asha Sharma, Microsoft’s CoreAI product president who joined in 2024, explained that Nadella’s new “production function” concept involves using AI to radically change how the company creates and delivers products. “AI breaks that relationship” between traditional software development inputs and outputs, Sharma said in a company-arranged interview, noting that AI agents and intelligence now act as scalable units that can generate software without corresponding increases in engineering hours.
CEO Satya Nadella ’s fear of irrelevance drives aggressive transformation push
The urgency stems from Nadella’s deep-seated fear of Microsoft becoming irrelevant. Speaking at an employee town hall in September, Nadella revealed he remains “haunted” by the collapse of Digital Equipment Corporation, once a dominant computer manufacturer that failed to adapt to industry shifts. “Some of the biggest businesses we’ve built might not be as relevant going forward,” Nadella admitted, warning that even Microsoft’s most profitable products face uncertainty.Earlier this year, Microsoft laid off approximately 6,000 employees in May and an additional 9,000 in July. In a July memo, Nadella described the cuts as part of a difficult process of “unlearning and learning” necessary to navigate the AI era. Employee morale has plummeted to all-time lows, with workers describing the company as feeling “markedly different, colder, more rigid,” according to reports from The Verge.
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