Microsoft CEO Satya Nadella calls for a cultural renewal, pays off layoffs, discusses office mandates and the Azure controversy and cautions staff of long-term business challenges.

Microsoft CEO Satya Nadella has told employees that the company needs to "do better" in rebuilding trust after laying off people and a mandate to return to offices. Addressing questions raised by staff on how to be more empathetic within workplace culture, Nadella said, "I think we can do better and we are going to do better."

HR chief Amy Coleman conceded to varying employee responses to office rules, pointing out that Seattle's workforce files an average of 2.4 days onsite per week. Nadella added that remote work makes mentorship skills difficult for new employees and interns, which adds to the challenge to the "social contract."

Looking to the future, Nadella said he is aware of long-term challenges for Microsoft whereby some of its largest businesses could lose relevance. "We have some very, very hard work ahead of us," he said, calling for "intellectual honesty" in meeting shifts in industry.

The meeting also discussed controversy after a report by The Guardian newspaper alleged that Israel's military used cloud computing company Microsoft's Azure during the conflict in Gaza. The company has since fired off five of any protesting workers. President Brad Smith encouraged staff that Microsoft will take Jewish employees who are facing harassment seriously and emphasized, "There is no room for anti-semitism at Microsoft."