Microsoft starts layoff of thousands of employees

SEATTLE – Microsoft on Thursday started the process of laying off thousands of employees, cuts that fall largely on the technology giant’s sales force.

The layoffs, anticipated widely since word of the plans leaked last week, come as Microsoft reconfigures its massive sales organization to focus on its cloud-computing products and sales to specific industries.

The cuts are expected to total thousands of workers, the company said, without giving specifics. The vast majority of the affected employees are located outside the United States.

Layoffs will also fall on some groups that had supported sales staff, including Microsoft’s information-technology department, finance, and the corporate, external, and legal affairs department, according to a person briefed on the cuts. Some of those to be laid off work at Microsoft’s headquarters outside Seattle.

Reorganizations, often including layoffs, are an annual occurrence as Microsoft’s fiscal calendar flips to a new year at the beginning of July. Microsoft started its new fiscal year on Monday with a 1,500-word memo that business sales chief Judson Althoff sent to Microsoft’s sales and marketing employees.

Layoffs weren’t mentioned, but the memo – also signed by global sales subsidiary chief Jean-Philippe Courtois and chief marketing officer Chris Capossela – said sales employees will be required to “operate in new ways.” The email detailed a range of changes to the organization of Microsoft’s sales groups aimed at simplifying the company’s sales teams. Before Thursday’s cuts, about 50,000 – or 40% – of Microsoft’s approximately 121,500 employees worked in sales.

That sales group was cobbled together during the decade in which Microsoft grew into a dominant player in business software by selling out-of-thebox software licenses. As the company in recent years has pushed to sell more of its services, Microsoft has tried to boost the technical expertise of its sales staff as it cut roles seen as redundant or no longer necessary.

– The Seattle Times/TNS