Microsoft is laying off thousands of employees as it implements changes to “better serve” customers and partners.
The tech giant confirmed the layoffs 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.”
According to a CNBC report, Microsoft announced a major reorganization plan that includes layoffs that will mostly affect sales, and thousands of jobs will be cut. Most of the positions expected to be eliminated are outside of the United States and related to the sales reorganization.
In some cases, employees were notified Thursday of the reductions. In some regions, in accordance with local laws and requirements, Microsoft is taking steps to notify employees that their jobs are under consideration.
Microsoft has 71,000 employees in the United States and 121,000 employees globally.
Sheryl Kingstone, research director of customer experience and commerce at 451 Research, said Microsoft is aligning resources for its future.
“It needs to focus its efforts on its customers’ demands for cloud services, artificial intelligence and intelligent cloud applications,” she said. “According to 451 Research’s Voice of the Enterprise, organizations run an average of 33 percent of their business applications in the cloud, with that expected to rise to an average of 49 percent in two years. In 2017, IT budgets for cloud services are expected to rise by 19 percent. (Microsoft) faces stiff competition from not only Amazon and Google for cloud infrastructure, but also Oracle, Salesforce and SAP for cloud software.”