Satya Nadella steps back from sales to double down on AI and data centres at Microsoft

Microsoft is undergoing a major internal reorganisation as CEO Satya Nadella reportedly shifts his focus away from sales and marketing to concentrate on artificial intelligence (AI), product innovation, and data centre expansion.

Read more: Microsoft CEO Satya Nadella warns AI could render “big businesses we built” irrelevant

In a memo to employees, Nadella announced that Judson Althoff, Microsoft’s long-time sales chief, will become CEO of the commercial business, taking charge of sales, marketing, and operations. Chief marketing officer Takeshi Numoto will also join the restructured group, as per media reports. The move, Nadella said, will allow him and senior engineering leaders to dedicate more time to Microsoft’s next phase of technological growth.

The decision underscores Microsoft’s aggressive pivot towards AI. Nadella highlighted plans to accelerate AI-driven product development and expand the company’s global data centre network. Reports suggest Microsoft has committed $80 billion to building massive data centres, underscoring its ambition to dominate the generative AI race alongside its deep partnership with OpenAI.

Read more: Satya Nadella urges Microsoft employees to ‘rebuild trust’ after layoffs, return-to-office push

This comes at a time when Nadella is said to be under mounting pressure to ensure Microsoft remains competitive in the AI race, where rivals such as OpenAI, Meta and other major tech players are making rapid advances. The company has responded by reducing its workforce and redirecting resources and attention toward AI development.

The tech giant has laid off more than 15,000 employees this year, including 9,000 in July alone.

Acknowledging the strain, Nadella told employees, “Before anything else, I want to speak to what’s been weighing heavily on me, and what I know many of you are thinking about: the recent job eliminations.” Despite the cuts, he noted that Microsoft’s overall headcount remains close to last year’s 228,000.

Read more: Microsoft CEO Satya Nadella shares 5 ChatGPT prompts he uses on Copilot for maximum efficiency

In a recent town hall, he said he was “haunted” by the downfall of once-dominant Digital Equipment Corporation (DEC), warning that Microsoft must adapt swiftly to avoid a similar fate in the AI era.

“This is the enigma of success in an industry that has no franchise value,” Nadella wrote in his note. “Progress isn’t linear. It’s dynamic, sometimes dissonant, and always demanding. But it’s also a new opportunity for us to shape, lead through, and have greater impact than ever before.”