Microsoft slashes 3000 jobs as company shifts focus to cloud services

Posted July 08, 2017

Microsoft has made a decision to rejig its sales and marketing department, and as a part of that the company is said to cut down almost 4,000 jobs from its sales and marketing team mostly, mostly from outside the US.

After about a week of speculations, Microsoft has confirmed that there will be major reorganisation at the company, including thousands of layoffs, reports CNBC.

A spokesperson for Microsoft tells CNBC that like all companies, they evaluate their business on a regular basis. "This can result in increased investment in some places and, from time-to-time, re- deployment in others", said an email from the abovementioned spokesperson.

The technology giant wants to strengthen its cloud computing division but is facing intense competition from rivals such as Amazon and Google.

Microsoft said while it's cutting jobs in some areas, it is expanding in others.

The tech company is overhauling its sales and marketing organisation in a move expected to cut up to 4,000 jobs, the majority outside the United States.

While future jobs are heavily relying on automation than ever, companies are often trimming the fat while retaining highly skilled workers. This is about 10% of Microsoft's total sales force. However, the distribution of layoff probabilities indicates that 75 percent of the sales employees at risk are those from overseas offices and branches, as confirmed by Microsoft itself.

Microsoft's fiscal year ended on 30 June, so the timing of the cutbacks could be tied to the company's move into a new fiscal year, which started on 1 July.

Microsoft's core business of selling software meant for PCs and services has matured, making incremental growth a tough proposition. All too often, we see dying internet companies trying to cling to the business model they know and love (ahem, Yahoo!).

The company said in the release Azure revenues rose 93 percent in the third quarter.