Microsoft to Lay Off Nearly 1,000 Workers in Sales Reorganization

Microsoft Corp. is planning to reorganize its sales force, which will result in the layoff of almost a thousand workers. This move is part of the tech giant’s broader strategy to focus on its fast-growing cloud-computing business and artificial intelligence investments. The reorganization is expected to be announced in early July, following the end of the company’s fiscal year in June.

The layoffs are primarily targeting the sales teams, but other divisions within the company may also be affected. The exact number of layoffs is still unspecified, but sources familiar with the arrangements indicate that the cuts could be significant. Microsoft has not yet commented on the matter, and the timing and final scope of the layoffs could still change.

This latest round of layoffs comes after Microsoft laid off roughly 6,000 employees in May, primarily from engineering and product roles. Those layoffs left most customer-facing positions, like sales and marketing, untouched. In April, Microsoft announced a change in its sales strategy, indicating that it would rely more on third-party companies to sell software products to small and midsize businesses. This shift is aimed at optimizing resources and focusing on core competencies.

As of June 2024, Microsoft had a global workforce of about 228,000 people, 45,000 of whom worked in sales and marketing. The company regularly evaluates its structure to align with long-term growth plans and typically makes internal reorganizations at year-end. The pending cuts are seen as a continuation of that trend, as Microsoft seeks to streamline its operations and manage operating expenses while continuing to invest in AI and cloud infrastructure.

Microsoft's focus on AI and cloud computing is part of a broader industry trend. Other tech giants are also investing heavily in AI and making significant changes to their workforce. For example, Amazon has announced plans to reduce its corporate workforce as it gains efficiency through the use of AI tools. Meta, on the other hand, has been letting go of employees in its Reality Labs division while seeking to hire top AI talent.

The tech industry has seen a wave of layoffs in recent years, with more than 150,000 job cuts across 549 companies in 2024. This trend is expected to continue as companies focus on optimizing their operations and investing in new technologies. Microsoft's latest round of layoffs is part of this broader trend, and the company is taking steps to ensure that it remains competitive in the rapidly evolving tech landscape.