Davos Diary: Microsoft chief gives little impression of a man burdened by job cuts

Satya Nadella, the poetry-loving chief of Microsoft, didn’t have the look of a man burdened by prospect of having to lay off a load of staff when he bounded on to a stage in Davos on Wednesday for a tete-a-tete with the World Economic Forum’s (WEF) founder and chairman, Klaus Schwab.

The Indian-American chief executive of nine years of the US tech giant, which is behind everything from the Windows and Office systems to Xbox video game consoles, was particularly enthusiastic about the opportunities in artificial intelligence and the immersive virtual world, known as the metaverse.

He was speaking to a friend in Schwab, with the WEF having this week unveiled a prototype with Microsoft and Accenture of a metaverse version of Davos where organisations, we were told, “can convene to learn about, create solutions for, and take action on the world’s most pressing challenges”.

“The vision you’ve had, Klaus, around using this new technology of metaverse and these immersive experiences to bring the world together, to have that sense of community presence and collaboration is absolutely needed,” he said. Who knew?

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Schwab, seldom one to ask the tough questions of political and business leaders invited to his cosy fireside chats, never went near reports that Microsoft, which employs 3,500 in the Republic, was preparing to axe thousands of jobs. Microsoft, according to Nadella, should be seen by employees “as a platform that is helping them to achieve what they want to achieve”.

The closest Nadella came to the subject was a comment that technology companies must learn to be efficient, following rapid expansion during the pandemic.

“I think we are going through a phase today where there is normalisation in demand. We will have to do more with less. We will have to show our own productivity gains with our own technology” he said.

Within hours, however, Microsoft confirmed that it plans to axe 10,000 jobs globally – or almost 5 per cent of its workforce – by the end of March, “in response to macroeconomic conditions and changing customer priorities”. It equates to a quarter of the 40,000 roles it added in the year to last June.

Mr Davos’s future

While it’s a topic of debate at Davos this year whether the WEF can advance its mission “to improve the situation of the world” with so many economic and geopolitical challenges out there and many top world leaders steering clear of the Swiss alpine town, it’s nothing on chatter in the corridors of the congress centre on the future of Mr Davos himself.

Politico, the online publication, reported this week about how corporate partners that bankroll the WEF, which has grown since 1971 into a $390 million (€369 million) a year foundation, are not impressed by the lack of succession strategy, with Schwab knocking on 85.

While Tony Blair, the former UK prime minister and regular Davos attendee (including this year), has been mooted as a potential successor, a group of current and past WEF employees that approached the Guardian with a series of gripes about how the organisation is controlled questioned the ability of the organisation to function without Schwab at the top.