Microsoft set to lay off thousands in cloud-first reorganisation
Mon 3 Jul 2017
Microsoft is reportedly preparing to lay off thousands of employees in an attempt to drive a greater focus on its cloud computing services.
According to a report by TechCrunch, the cuts, which are expected to affect employees globally, forms part of the tech giant’s strategy to accelerate its Azure offerings. The plans are reported to include cuts to local marketing and sales teams in certain countries worldwide.
Azure has been performing well, with revenue growth almost doubling during the third quarter and 93% sales growth. However, as the service continues to face strong competition from the likes of Amazon Web Services (AWS), Microsoft is eager to channel its efforts into the booming cloud market.
Microsoft still trails AWS, which generated $3.7 billion in revenue in 2016 – placing it far ahead of the next five big cloud players.
In a recent research note, analyst Brent Bracelin forecasted that Microsoft Azure could overtake AWS in revenue this year, which would see it take the lead position for the first time. Bracelin commended Microsoft for ‘unmatched product depth and breadth.’
Last summer, Microsoft announced plans to cut nearly 3,000 jobs from its global workforce, with the majority of those linked to its exit from the smartphone space.
As part of those moves, Judson Althoff and Jean-Philippe Courtois took over Microsoft’s sales and marketing teams, following the departure of former COO Kevin Turner.
Althoff has been public in his criticism of previous Azure sales approaches.
This January, the company added that it would lay off a further 700 jobs as part of the restructuring.
Last week, reports noted that Microsoft would confirm its new plans this Wednesday. The company has not yet provided any comment on the reported reorganisation.