Microsoft Plans Thousands of Sales Layoffs Post-Fiscal Year

Microsoft is planning to lay off several thousand employees, with the majority of the cuts expected to be in the sales department. This move comes after the company laid off approximately 6,000 employees in May, primarily affecting product and engineering positions. The latest round of layoffs is anticipated to be announced shortly after the end of the fiscal year in early July. The company has been investing heavily in artificial intelligence while streamlining its workforce.

The decision to focus on the sales department for this round of layoffs is part of a broader strategy to reduce costs and reallocate resources. In April, Microsoft had already informed employees that it would be outsourcing more of its software sales for small and medium-sized enterprises to third-party companies. This shift is aimed at optimizing resource allocation and ensuring that investments are directed towards areas that drive business growth, such as server and data center infrastructure, where the company is pouring hundreds of billions of dollars.

The layoffs are expected to impact not only the sales department but also other teams within the company. The exact number of employees to be laid off has not been finalized, and the timing of the announcement may still be subject to change. Microsoft has a history of adjusting its organizational structure and announcing personnel changes around the end of its fiscal year. As of June 2024, the company had approximately 228,000 employees, with around 45,000 working in sales and marketing.

This latest round of layoffs follows a trend of cost-cutting measures implemented by the company. In May, the layoffs primarily affected product and engineering roles, with customer-facing positions in sales and marketing largely spared. The company has been clear about its commitment to controlling expenses in other areas while increasing investments in strategic growth sectors. High-level management has communicated this strategy both internally and to external stakeholders, emphasizing the need for financial discipline to support long-term growth.