Microsoft CEO: Next two years will be 'most challenging'

Tumult within the tech sector will continue through 2025, Microsoft CEO Satya Nadella says.

Why it matters: Conditions that helped accelerate investments in the industry, including increased time at home and government stimulus, have dissipated, leading tech companies to turn financially conservative.

Catch up quick: "The next two years are probably going to be the most challenging," Nadella told CNBCTV18 in an interview posted Wednesday.

• There was an "acceleration" of demand during the pandemic which has now been somewhat normalized, he added.
• "On top of it, there is a real recession in large parts of the world and so the combination of pull forward and recession means we will have to adjust."

The big picture: More than 1,000 tech companies laid off more than 150,000 people last year, according to Layoffs.fyi.

• This week alone, Salesforce, Vimeo and Stitch Fix announced new cuts impacting nearly 10,000 people in total, while Amazon's layoffs reportedly expanded by 8,000.

What to watch: Nadella, whose own company has recently cut jobs, remains optimistic that there "can be another massive growth cycle for the tech industry," driven by what he says will define the next wave of computing — A.I.

• He also cautioned against extrapolating short term pains within the tech industry to the broader job market for tech workers.

• "Tech industry employment is not tech employment," he said. "That, I think, is the key divergence that needs to be well understood."
• "Overall tech jobs has actually increased," he added, citing growth in tech roles within financial services, energy and retail.
• "In the long run, all those employees in all those industries are going to consume more tech infrastructure ... There's more employment outside of the tech industry of technical talent. And so that's I think what we're banking on."

Go deeper

• Tech layoffs push H-1B visa workers into limbo
• Microsoft becomes latest tech firm to cut staff