Microsoft plans thousands of job cuts in a sales staff overhaul to fuel cloud growth
- Microsoft announced a major reorganization on Thursday that includes layoffs.
- Microsoft's layoffs will mostly affect sales, and thousands of jobs will be cut.
- Most of the changes will affect employees outside of the U.S.
Microsoft announced a major reorganization on Wednesday that will include thousands of layoffs, largely in sales.
The job cuts amount to less than 10 percent of the company's total sales force, and about 75 percent of them will be outside the U.S., the company said.
Reports from last week suggested this was going to happen and that Microsoft was going to specifically focus on how it sells its cloud-services product, Azure.
Microsoft's cloud business has been booming over recent quarters — Microsoft noted Azure sales growth of 93 percent last quarter. While Amazon has become a bigger competitor in the space, Microsoft's restructuring is to pivot to software as a service, platform as a service and infrastructure.
"Microsoft is implementing changes to better serve our customers and partners," a Microsoft spokesperson told CNBC. "Today, we are taking steps to notify some employees that their jobs are under consideration or that their positions will be eliminated. 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."
Microsoft said its goal isn't to cut costs and the move is instead a change in how Microsoft handles sales. It said its plan is to use employees who are more knowledgeable about specific verticals so they can sell bigger packages.
Microsoft has 71,000 employees in the U.S. and 121,000 employees around the globe, suggesting that these cuts are relatively small compared to the size of its entire workforce.
— CNBC's Jon Fortt contributed to this report.
Clarification -- An earlier version of this story misstated the number of employees to suffer layoffs. Microsoft later clarified that the number will be "thousands."
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