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"What I miss is when you walk into a physical meeting, you are talking to the person that is next to you, you're able to connect with them for the two minutes before and after," Nadella said.
While Microsoft was one of the first companies to shift its tech workforce remotely when the pandemic began to spread across the globe, Nadella says that switching to entirely remote offices would just be "replacing one dogma with another dogma."
"What does burnout look like? What does mental health look like? What does that connectivity and the community building look like?" Nadella said. "One of the things I feel is, hey, maybe we are burning some of the social capital we built up in this phase where we are all working remote. What's the measure for that?"
The company has extended its work-from-home policy until at least October.
The comments from Nadella come as competitor Twitter is letting its employees decide whether or not they will come back to the office after CEO Jack Dorsey said in an email to employees that they could work remotely even after the coronavirus pandemic ends.
"We were uniquely positioned to respond quickly and allow folks to work from home given our emphasis on decentralization and supporting a distributed workforce capable of working from anywhere," a spokesperson for the social media platform told FOX Business on Tuesday. "The past few months have proven we can make that work."
The spokesperson noted that Twitter employees "are in a role and situation that enables them to work from home and [if] they want to continue to do so forever, we will make that happen."
The company says it is unlikely that employees will be back in the office before September, with the exception of jobs that require physical presence, such as those who maintain the company's servers. Additionally, the company has cut off all business travel before September with very few exceptions and said there will be no in-person meetings until 2021.
"We're proud of the early action we took to protect the health of our employees and our communities," the spokesperson said. "That will remain our top priority as we work through the unknowns of the coming months."
Sales rose 15 percent to $35 billion in the third quarter, bolstered by strong results in its cloud-computing business as Americans relied on virtual workplaces amid shelter-in-place orders. Revenue from the personal computing segment rose 3 percent to $11 billion, outpacing Microsoft's internal expectations despite the company warning in February that its revenue target of $10.75 billion to $11.15 billion would not be reached due to the pandemic's impact on its supply chain.
Microsoft's quarterly earnings per share were $1.40. Wall Street expected revenue of $33.4 billion and earnings per share of $1.26, according to Refinitiv data.