Microsoft Expected to Cut “Thousands” of Jobs
Microsoft initiated a big workforce reorganization that could see thousands of employees leaving the company.
The business technology giant said Thursday it would lay off workers, primarily in the company’s sales division, according to a CNBC report. Microsoft (MSFT) said that the layoffs represent less than 10% of its sales staff, with 75% of the cuts affecting non U.S.-based employees.
“Today, we are taking steps to notify some employees that their jobs are under consideration or that their positions will be eliminated,” a Microsoft spokesperson told CNBC in a statement. “Like all companies, we evaluate our business on a regular basis. This can result in increased investment in some places and, from time-to-time, re-deployment in others.”
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Rumors of the layoffs emerged last week when the Puget Sound Business Journal reported that Microsoft was looking to overhaul its workforce as it concentrates on its cloud business unit. Under CEO Satya Nadella, Microsoft has been concentrating on its Azure cloud computing business in which companies can buy computing resources in a pay-as-you-go model similar to competing offerings by Amazon Web Services (AMZN) and Google (GOOG).
Additionally, Microsoft has been increasingly selling versions of its various enterprise software like its Office work suite and Dynamics customer relationship management software in a cloud subscription model, similar to companies like Salesforce (CRM).
Microsoft said during its latest quarterly earnings report that its cloud business rose 11% year-over-year to $6.76 billion.
Fortune contacted Microsoft for more information and will update this story if it responds.
Update: July 6, 11:45 AM PST.
Microsoft confirmed the layoffs to Fortune, but declined to comment directly on how many employees were impacted, only saying that the number will be in the “thousands.”
Update: 2:00 PM PST.
The New York Times, citing an unnamed source, reports that Microsoft will layoff between 3,000 to 4,000 workers.