Microsoft is laying off ‘thousands’ of staff in a major global sales reorganization

Microsoft is laying off ‘thousands’ of staff in a major global sales reorganization

Microsoft is expected to notify employees of an internal reorganization that could result in some layoffs early this week, and possibly as soon as Monday June 3.

The reorganization — typical for the company as it begins its next fiscal year (FY 18 kicked off July 1) — is largely expected to be focused this time around on its sales organization. This reorganization looks to be a result of a change of leadership this past year. Executives Judson Althoff and Jean-Philippe Courtois took charge of Microsoft’s sales and marketing divisions following the exit of long-serving COO Kevin Turner last summer. Althoff, for one, has been public in his criticism of previous sales approaches, and he is keen to make Azure a central part of the focus.

Bloomberg reported late last week that the coming reorg would be focused on improving the way Microsoft sells its cloud software and services.

In January, 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 Judston Altoff, a Microsoft Executive Vice President in charge of the company’s Worldwide Commercial Business Group.

While some have reported that the coming reorg may result in substantial layoffs, I’m hearing from some my contacts that the number of people cut as a result of the reorg may not be huge, and that Microsoft may attempt to reassign those affected, plus position cuts as attrition.

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.

Altoff has been trying for the last several months to get Microsoft’s salesforce to focus on selling Azure and other cloud services. The company has put a lot of eggs in its cloud solutions architects’ baskets in recent months. But execs also have worked to balance these employees’ cloud-selling roles with those of its partners. Microsoft has been working overtime to get more resellers into the company’s Cloud Solution Provider (CSP) program.

Microsoft has been working to come up with a new way to sell support services to customers in order to increase their overall spend, sources say. It’s not clear how Microsoft’s Enterprise Agreement volume-licensing deals may be affected.

In June, Microsoft quietly reorganized a number of teams in its Cloud + Enterprise and AI + Research units. The company also began dissembling its Developer Experience unit, reassigning a number of people in that organization to other teams internally.

Microsoft’s coming reorg comes just days before the company’s worldwide partner conference, Inspire, in Washington D.C. and its sales and marketing conference the following week in Las Vegas.

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