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Microsoft could lay off thousands to focus on cloud

Andrew Hamilton

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Microsoft may lay off thousands in driver for cloud services

A source familiar with the plans has warned that this latest reorganisation could see thousands of jobs lost, although Microsoft has not confirmed any changes as yet.

Microsoft Corp. yesterday completed a reorganisation of its Global Sales Team to focus on cloud services, but an insider source has said that the move could lead to thousands of layoffs. The revamped structure will focus the team’s efforts on two areas going forward – large enterprise companies and small and medium businesses – according to an email from Executive Vice President Judson Althoff sent to employees on Monday morning. Previously, the sales team targeted commercial segments such as the public sector, along with specific industries. While the details from Monday’s email are scant, Althoff is alleged to have said the move would, “align the right resources for the right customer at the right time” – a likely indication that the company is gearing itself towards fully penetrating the cloud market.

Microsoft is likely gearing itself towards challenging cloud-computing leader Amazon Inc.’s Amazon Web Services with its own public cloud offering Microsoft Azure. Microsoft is billing Azure as the only public cloud which can offer ‘Cognitive APIs’, Bots, Machine Learning and Blockchain as a Service (BaaS). But Deutsche Bank predicts that despite these services, sales of Azure technology are expected to only amount to one quarter of AWS’. According to Yahoo!, Althoff’s new role has seen him experimenting with new methods to make the Azure platform more desirable to businesses, including offering trials of the service to potential buyers and partnering with software vendors.

While the email in question made no specific mention of layoffs, the insider source told the Wall Street Journal that cuts could hit offices ‘around the world’. Microsoft typically restructures segments of its workforce at the end of every fiscal year (which closed this past Friday), helping to fuel rumours of pending layoffs. The company has made notable changes during this period before, with last year’s reshuffle seeing the exit of long-serving COO Kevin Turner in early July. Turner was then replaced by the incumbent Althoff and colleague Jean-Philippe Courtois, Executive Vice President in charge of Global Sales, Marketing and Operations.

But the reshuffle culminated later that month when Microsoft announced that it was to cut nearly 3,000 jobs, at least 900 of which would be in sales. Only two months prior to this, the company also said that it would lay off another 1,850 positions related to its faltering smartphone sectors. In July 2015, the company culled 7,800 jobs and wrote-off $7.6 billion from its books as it completed its acquisition of the majority of Nokia’s hardware assets.

While no official announcements have been made, TechCrunch expects the changes to be formally declared within the week.

Andrew Hamilton

Andrew Hamilton

PR & Content Executive at Hutchinson Networks

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