Three days after announcing internally its latest reorg, Microsoft has announced the resulting layoffs that have been rumored for the past week.
On July 6, Microsoft officials said they were notifying employees whose jobs were being cut.
One source close to the company said Microsoft would be cutting “several thousands” of employees. CNBC said Microsoft would be shedding up to 3,000 employees, but didn’t cite the source of that number.
Some of those whose jobs are cut may be reassigned to other posts in the company, I’m hearing.
Microsoft officials declined to specify which groups will take the brunt, but given the July 3 reorg was all about Microsoft’s sales organization, it’s a safe bet most are coming from field sales, marketing, and other related teams.
I’m hearing these cuts are not meant primarily to be a cost-cutting measure; instead, Microsoft is redefining some of its sales roles in a more technical way, given the company’s focus on pushing the digital transformation concept.
At the end of March 2017, Microsoft employed 121,567 worldwide. A year ago, approximately 50,000 of Microsoft’s employees were engaged in sales, marketing, and services jobs.
Today’s announcement is not the biggest layoff Microsoft has had. In 2014, company officials announced the company would be eliminating 18,000 jobs over the course of a year, with 12,500 of those associated with the Nokia Devices and Services acquisition. Those cuts began with a first wave of 13,000, the majority of whom Microsoft notified over a six-month period.
Last year, Microsoft announced additional job cuts of 2,850, including at least 900 from its sales organization. That was on top of other hefty headcount reductions from its smartphone business.
Microsoft often announces reorgs and layoffs around the start of the company’s new fiscal year, July 1. This year’s reorg was all about revamping the company’s commercial and consumer sales organizations in the name of digital transformation.
In January this year, Microsoft announced a number of organization changes that affected its sales and marketing organizations. As part of those moves, a number of those sales and marketing teams were moved under Judson Althoff, a Microsoft executive vice president in charge of the company’s Worldwide Commercial Business Group.