UPDATE July 6, 2017 20:04 CEST: Microsoft has confirmed the 2017 layoffs, which will affect about 3,000 employees as the company restructures its sales-units to focus even more on growing its cloud-business.
UPDATE July 4, 2017 12:19 CEST: Microsoft has confirmed a restructure of its sales and marketing organization via internal memos to employees.
July 3, 2017 17:22 CEST:
Bad Microsoft layoff news: The company is preparing to layoff thousands of employees from all around the world. The move is reported to be centred around reorganizing its salesforce.
Microsoft is currently in its best position in years, making solid revenue and enjoying growth across most key products, so the move is related to a change in strategy.
Microsoft Layoffs 2017: SME and Enterprise Customer Units
A part of this restructure will be the merger between its SME divisions and enterprise customers unit. The report points out that the official announcement of the layoffs will happen sometime this week.
These layoffs have already been widely reported and a thought to be Microsoft’s increasing move towards the cloud. More specifically, the company wants to emphasize cloud services through its sales teams. Early estimations suggest the layoffs will be the most substantial in the sales division for many years.
Last year, Microsoft changed up the leadership of its sales business. Judson Althoff and Jean-Philippe Courtois took charge of the sales and marketing divisions. They replaced outgoing COO Kevin Turner. It is likely Microsoft has the restructure in mind when it made the executive shuffle. Althoff is a noted critic of how the company would approach sales and wants a push towards Azure.
We certainly expect Microsoft to make an announcement through early July. This month is the end of the company’s fiscal year, so it is a perfect time to announce organizational changes. It is also worth noting that the company releases employee headcounts through this month.
Despite doing well at the moment, Microsoft has also cut jobs regularly. Mobile is one of the few areas where the company is struggling. To reflect that, Microsoft pulled back from smartphone hardware last year.
The result was the shuttering of the Lumia brand and cut 1,850 staff. In total, the ill-fated multi-billion-dollar Nokia acquisition resulted in 7,800 jobs lost.
In September last year, Microsoft said it will cut 2,850 jobs, with hundreds cut from global Skype locations and 900 from the salesforce.