Microsoft to lay off thousands to turn focus on fast-growing cloud business

PUBLISHED : Friday, 07 July, 2017, 1:13am
UPDATED : Friday, 07 July, 2017, 2:22am

Microsoft plans to shed thousands of jobs in a major reboot to focus on its fast-growing cloud-computing business.

“Microsoft is implementing changes to better serve our customers and partners,” Microsoft said in a statement. “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.”

The software giant did not specify how many jobs would be cut. When asked about cuts during a conference call, Microsoft President Brad Smith had no comment on Thursday.

The restructuring largely affects the software giant’s sales operations outside the US under chief marketing officer Chris Capossela, executive vice presidents Judson Althoff and Jean-Philippe Courtois. All three executives on Monday notified employees of a reorganisation, but did not mention layoffs.

Disappointing sales of Microsoft’s Surface computer line, which has plunged 26 per cent and dragged down PC sales by 7 per cent, have undercut fiscal third quarter results, announced in April. Cloud sales, by comparison, have nearly doubled.

The company’s profits overall soared 28 per cent to US$4.8 billion. Sales surged 8 per cent to US$22 billion.

Microsoft is undergoing a huge reorganisation to sell more cloud subscriptions and less software

Strong cloud-based sales made up for the drop in PC revenue, making good on Althoff’s pledge for Microsoft’s Azure cloud-computing service to be the centrepiece of the company’s sales strategy.

Microsoft’s change in strategy had a ripple effect on its sales, prompting a move from on-site support to telephone support, says long-time Microsoft analyst Jack Gold.