Microsoft's cloud focus could mean yet more layoffs

"Thousands" of employees could go in an organizational merger.

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Steve Dent
July 3, 2017 8:01 AM
Robert Giroux via Getty Images
Robert Giroux via Getty Images

Microsoft is going through another reorganization that could result in "thousands" of layoffs, particularly to its sales force, according to TechCrunch, Bloomberg and others. The company is reportedly shifting teams around to emphasize Azure cloud sales, rather than boxed software, which is rapidly becoming a dying business. So far, there's no news on exactly which groups and regions will be affected.

There's also no word on how this affects Microsoft's Surface division, which has seen solid growth until early this year, when sales dropped by 26 percent. However, Microsoft chalked that up to increased competition and its aging lineup of devices. Since then, Microsoft has unveiled a new Surface Pro and the all-new Surface Laptop, which has generally met with solid reviews.

Last year, Microsoft laid off COO Kevin Turner, who oversaw a massive group of 51,000 employees dedicated to sales, marketing, operations and corporate technology. The division was subsequently broken into pieces with Judson Althoff heading the business sales division. Althoff recently criticized Microsoft's approach to selling Azure, its cloud computing platform, saying it was still using decades-old strategies developed for physical software.

Last year around this time, Microsoft said it would cut 2,850 jobs, shortly after letting 1,850 staff go -- all mostly related to its pretty-much-defunct smartphone business. The timing for the latest layoffs isn't a coincidence, as the company's fiscal year is nearly over and it's about to release earnings for its final quarter. The company currently employs around 121,500 people, including 10,000 from its $26.2 billion LinkedIn acquisition.

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