Microsoft reboots, calls for layoffs
Software giant shifts focus to cloud- computing
Microsoft plans to shed thousands of jobs in a major reboot to focus on its growing cloud- computing business.
“Microsoft is implementing changes to better serve our customers and partners,” the company said in a statement to USA TODAY. “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 did not specify how many jobs would be cut.
The restructuring largely affects the software giant’s sales operations outside the U. S. under chief marketing officer Chris Capossela, executive vice presidents Judson Althoff and Jean- Philippe Courtois. Microsoft employs 121,567 people worldwide, 71,594 in the U. S.
Microsoft shares fell 0.7% Thursday to $ 68.57.
Disappointing sales of Microsoft’s Surface computer line — they plunged 26%, dragging down PC sales 7% — undercut fiscal third- quarter results, announced in April, while its Azure cloud revenue nearly doubled. The Redmond, Wash., firm’s profits overall soared 28% to $ 4.8 billion. Sales rose 8% to $ 22 billion.
Strong cloud- based sales made up for the drop in PC revenue, making good on Althoff’s pledge for Microsoft’s Azure cloud- computing service to be the centerpiece of its sales strategy.
Microsoft’s change in strategy had a ripple effect on its sales, prompting a move from on- site support to telephone support, longtime Microsoft analyst Jack Gold says.
“This is not the first realignment Microsoft is undertaking due to the shift to cloud, and it’s unlikely to be the last one,” Gold says.