Microsoft Officially Announces Mass Layoffs

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Thousands to Lose Their Jobs as Microsoft Sheds Positions

Microsoft Corporation (NASDAQ:MSFT) has confirmed what many knew to be on the way: mass layoffs, amounting to a reported 3,000 to 5,000 fewer employees at the tech giant.

The layoffs will largely affect the sales division, and CNBC is reporting that the layoffs will mostly hit non-U.S. workers, with 75% of the jobs shed coming from abroad.

“Microsoft is implementing changes to better serve our customers and partners,” a Microsoft spokesperson wrote in a statement. “Today, we are taking steps to notify some employees that their jobs are under consideration or that their positions will be eliminated. Like all companies, we evaluate our business on a regular basis. This can result in increased investment in some places and, from time-to-time, re-deployment in others.”

The massive layoffs are intended to refocus Microsoft in a new direction, with the company putting more resources in its cloud service, “Azure.” The move will likely mean that Microsoft will put more emphasis on small and medium businesses as clients, instead of primarily focusing on the heavy hitters like government, oil and gas, and pharma.

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Microsoft has a rough total of 71,000 employees in the U.S. and 121,000 employees worldwide, meaning that these job cuts will amount to less than 10% of the total workforce, though still represent a significant number of cuts for such a massive company.

Microsoft’s renewed interest in Azure shows that the company has looked for alternative revenue streams as sales of its hardware and “Windows” suite offerings have begun to shrink. Azure is booming, coinciding with the mass migration towards the cloud, meaning that Microsoft is likely positioning itself for the future with this restructured move.

At the same time, it has begun branching out in terms of product offerings, with new desktop, laptop, and tablet options. The company overall is headed in a new direction, it seems, and these cuts are certainly a negative consequence of that shift.

 

Sources

Microsoft plans thousands of job cuts in a sales staff overhaul to fuel cloud growth,” CNBC, July 6, 2017.

Microsoft confirms layoff reports, reorganization expected to impact thousands,” TechCrunch, July 6, 2017.

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Categories: Job Cuts, News

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