Microsoft plans thousands of job cuts in a sales staff overhaul to fuel cloud growth

Microsoft plans thousands of job cuts in a sales staff overhaul to fuel cloud growth
A display for the Windows 10 operating system is seen in a store window of the Microsoft store at Roosevelt Field in Garden City, New York, US on July 29, 2015.
PHOTO: Reuters

Microsoft announced a major reorganisation on Wednesday that will include thousands of layoffs, largely in sales.

The job cuts amount to less than 10 per cent of the company's total sales force, and about 75 per cent of them will be outside the US, 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 per cent 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 US and 121,000 employees around the globe, suggesting that these cuts are relatively small compared to the size of its entire workforce.

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