Microsoft's sales force reorganization could lead to "thousands" of layoffs

Microsoft CEO Satya Nadella exits the stage after speaking at a 2014 news briefing on cloud computing. The expected reorganization which could be announced as soon as next week comes as Microsoft retools its sales teams to emphasize its cloud-computing

Microsoft is reportedly preparing to lay off thousands of employees in an attempt to drive a greater focus on its cloud computing services.

According to TechCrunch, a source with knowledge of the planned "downsizing" indicated that the company would lay off the "thousands" of workers across its global footprint. And an article in Bloomberg Friday citing "people familiar with the matter" said the changes would affect Microsoft's Worldwide Commercial Business and the global sales and marketing group.

The exact number of layoffs is unclear, though they will hit staff in offices around the world, this person said. The situation was similar in July of 2015 when Microsoft made 7,800 job cuts related to their failed forays into the smartphone market. Since the appointment of Nadella, the former head of Microsoft's cloud division, the company has put more and more resources toward building out its Azure cloud computing platform and selling software subscriptions to businesses.

Job cuts are likely to result from the changes, said the people, who asked not to be identified speaking about unannounced plans.


"Our results this quarter reflect the trust customers are placing in the Microsoft Cloud", Microsoft CEO Satya Nadella said in the earnings statement. This is likely as part of an effort to slowly move away from its software sales businesses and provide a boost to its burgeoning enterprise cloud services.

Microsoft was recently rumored to be reorganizing its sales department.

So, if history repeats itself, the time looks apt for the company to sack its employees as, in the recent years, Microsoft has been consistent in laying off a huge chunk of its employees during this time of the year. The organization has historically focused on selling packaged software and services to corporate buyers.

Last month, in a research note to investors, Brent Bracelin, analyst at Pacific Crest Securities, predicted Azure could surpass AWS in revenue this year, which would mark the first time Azure - once a laggard - would transition into a cloud leader. As always, we'll keep you up to date as soon as more information becomes available.

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