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July 6, 2017

Microsoft to lay off 3,000 people as it tries to boost Azure

by John_A

As expected, Microsoft has announced a radical reorganization of its sales business, with thousands of people expected to lose their jobs. The process will cut up to 3,000 jobs, mainly in the sales department — that’s less than 10 percent of Microsoft’s total sales force, and roughly 75 percent of the cuts will be outside of the United States, CNBC reports. The reorganization effort is meant to help Microsoft focus on building up Azure, its cloud platform.

Microsoft is a titan of the software sales industry, with an army of people all working to get Windows and Office into businesses. But, with the advent of cloud services, people are looking twice at those pricey Microsoft licenses and wondering if Google or Amazon couldn’t do a better job.

As Bloomberg pointed out before the announcement, both Google and Amazon offer online services for commerce, and boast about their prowess in AI. In addition, neither company has an enormous legacy software-sales business that they have to maintain at great expense, reducing costs for consumers.

If you put together Azure and Office365, then the company’s web-based offerings are a similar size to Amazon Web Services. But, as The Economist notes, Azure continues to be a money loser, which is a problem for a company that wants to make billions from the cloud by 2020.

Jessica Conditt contributed to this report.

Source: CNBC

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