July 26, 2017

Microsoft confirms layoffs, reportedly impacting 3000 positions globally, mostly in sales

07 July 2017, 12:44 | Candice Butler

Jessica Lyons Hardcastle

Microsoft Reorganization Aims to Boost Cloud Business

The latest round of cuts comes after Microsoft last July cut 2,850 employees from its smartphone hardware business and global sales division. "This can result in increased investment in some places and, from time-to-time, re-deployment in others", a Microsoft spokesperson told CNBC.

Microsoft has 121,000 employees worldwide, a lot of them in the U.S. The company has a small sales office in Portland's Pearl District and makes its Surface Hub giant-screen computer in Wilsonville. Most of the jobs cut at the time were related to Nokia.

Since taking over as chief executive in 2014, Satya Nadella has sharpened the company's focus on its cloud computing unit to counter a prolonged slowdown in the PC market. Approximately 3,000 people could be laid off as part of the reorganization, largely in sales.

The company is now concentrating on selling recurring subscriptions for software accessible on multiple devices, a rapidly growing trend known as 'cloud computing'.

However, Microsoft is still lagging a long way behind Amazon Web Services in the sector.

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The natural reaction to this type of announcement is that Microsoft is struggling and that these cuts are a sign of Nadella reducing costs to keep the company in the black.

"From large multi-nationals to small and medium businesses to non-profits all over the world, organizations are using Microsoft's cloud platforms to power their digital transformation".

Given the size of the Microsoft work force - the company has 71,000 US -based employees and 121,000 employees internationally - these layoffs represent a comparatively small move.

Representatives from Microsoft confirmed the contents of the memo, and said in a statement that the company notified employees of the restructuring earlier this week. When asked about cuts during a conference call, Microsoft President Brad Smith had no comment on Thursday.

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