Reorganization Efforts Lead to Thousands of Microsoft Layoffs

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Microsoft to Lay Off Thousands of Employees

The world’s biggest software company, Microsoft Corporation, has announced that it is undertaking a new reorganization effort in order to make its cloud business the focal point of its sales strategy. Thousands of Microsoft employees across the globe will be affected as part of the reorganization move.

An e-mail sent to employees by Judson Althoff,  Microsoft’s Executive Vice President of Worldwide Commercial Business, says that the company aims to shift its focus to selling its cloud-based products to two key segments: large enterprise clients and small- and medium-sized businesses.

Consequently, the new strategy will force sales employees who are working under the old terms to face layoffs. The software company has not formally disclosed the number of employees who will face job cuts. However, the number could be in the thousands, and employees in various geographic locations will be affected.

Competition Against Amazon Forces Restructuring at Microsoft

The reorganization comes after the software giant gears up to take on its biggest rival in the cloud industry, Amazon.com, Inc. (NASDAQ:AMZN). Amazon has become a world leader with its cloud-based enterprise solutions that fall under the “Amazon Web Services” (AWS) umbrella. AWS takes up the biggest market share of cloud-based infrastructure for businesses in the world.

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Microsoft is now striving to increase sales for its competing product, “Microsoft Azure.”

The reorganization effort is falling under the command of Althoff, who took on his current role last year. He has been critical of Microsoft’s prior sales strategy, and he is working hard to make Microsoft Azure a cash cow for Microsoft. He is now working on finding ways to attract big customers to the Microsoft platform. The new sales strategy is expected to help the company achieve that goal.

Microsoft is usually known for announcing its reorganization plans at the end of its fiscal years, which usually falls in July. The company announced another reorganization plan last year, resulting in about 2,850 jobs being slashed.

As of the end of March 2017, Microsoft employed a global workforce of about 121,500 employees.

 

Sources

Microsoft Revamps Its Global Sales Team,” The Wall Street Journal, July 3, 2017.

Microsoft said to be planning sales force overhaul; layoffs likely,” The Seattle Times, June 30, 2017.

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Categories: Job Cuts, News

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