Microsoft begins latest round of layoffs amid reorganization
Microsoft has started cutting thousands of positions, mostly in its sales department, days after announcing it would shift its sales strategy to focus more on cloud services than on its traditional server and desktop businesses.
“Microsoft is implementing changes to better serve our customers and partners. Today, we are taking steps to notify some employees that their jobs are under consideration or that their positions will be eliminated,” the company said in a statement to The Washington Post. “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, redeployment in others.”
The job cuts were expected after Microsoft’s announcement last week. A majority of the cuts will be made to positions outside of the United States, the company said. Microsoft said that thousands of jobs would be eliminated, but it declined to confirm reports that place that figure at 3,000 positions.
There will also be a few cuts at the firm’s headquarters in Redmond, Wash., the Seattle Times reported.
Cloud services have been the main focus for Microsoft chief executive Satya Nadella since he took over the company in 2014 with a mandate to modernize the firm for a mobile-first, cloud-first world. Nadella, who came up through the firm’s cloud division, has narrowed Microsoft’s focus and doggedly trimmed the company’s workforce.
In 2014, he announced he planned to cut up to 18,000 jobs.
Many cuts came from the firm’s smartphone division, which Nadella sold off in 2016, two years after his predecessor purchased them for $7.2 billion. Last July, Microsoft said it would cut 2,850 positions.
Nadella’s focus on the cloud has paid off for the software giant. In April, the company said that the Azure division had grown its revenue by 93 per cent over the same period the previous year. Its main rival for cloud dominance is Amazon — which is the market leader with its Amazon Web Services — but Microsoft’s strong growth has cheered investors and impressed analysts.
The cuts to the sales force are meant to streamline Azure sales, in line with the simplified sales philosophy outlined in an internal Microsoft memo leaked to the media earlier this week.
Microsoft is laying off thousands of employees in a shake-up aimed at selling more subscriptions to software applications that can be used on any internet-connected device.