Microsoft has confirmed a round of layoffs said to impact about 10 percent of its total salesforce, or approximately 3,000 workers, with the majority outside of the U.S., according to several reports on Thursday.
The news comes nearly a week after rumors started to swirl that Microsoft would make job cuts in the thousands, in areas like field sales, to support growth in its Azure public cloud. Microsoft said that 75 percent of the jobs that will be eliminated are outside of the U.S.
The company said it is implementing the changes not to cut costs, but to improve how it handles sales; specifically, it said it will use employees who are more knowledgeable in particular verticals so they can sell bigger packages, CNBC reports.
As Microsoft vies for more enterprise cloud clients, having better trained salespeople, who are knowledgeable about a specific vertical, will mean they are better equipped to meet client needs. To that end, Microsoft said in an internal memo that it would split commercial sales into two segments – one targeting the biggest customers and one on small and medium clients. In addition, Microsoft employees will be aligned around six industry verticals - manufacturing, financial services, retail, health, education and government.
"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 told CNBC.