Microsoft Layoffs Loom: Sales Team Braces for Impact in Coming Weeks

According to various media reports, Microsoft is planning to lay off thousands of employees, mostly in its sales business. The layoffs are anticipated to be revealed in early July as the corporation continues to restructure in the face of significant expenditures in artificial intelligence.

Following 6,000 layoffs in May and more than 300 more a few weeks later, the layoffs will be the Redmond-based software giant's third significant employment decrease of the year.

The expected summer layoffs were initially reported by Bloomberg, and according to sources, the timing aligns with the beginning of Microsoft's new fiscal year in July.

Sales Team to Face the Thunder Storm

The upcoming cuts will disproportionately target customer-facing roles, in contrast to prior rounds that predominantly hit software engineers and product developers.

As of June 2024, about 45,000 of Microsoft's 228,000 employees work in the sales and marketing business. This change was hinted at by the company in April when it declared that it will outsource more software sales to small and midsized businesses to other companies.

Although sales teams will take the brunt of the cuts, a media group reported that they won't be the only ones affected.

Microsoft Focusing More on AI

The larger difficulty tech businesses face in striking a balance between AI spending and operational efficiency is reflected in Microsoft's layoffs. This fiscal year, the business has set aside almost $80 billion for data centre expenditures, and officials have promised Wall Street that they will keep costs under control in other areas.

At a recent internal town hall, CEO Satya Nadella told staff that the previous cuts were a "realignment" rather than a result of performance evaluations, emphasising that employees were not failing. It was about shifting into the next phase.

Microsoft frequently announces organisational changes close to the conclusion of its fiscal year, so the timing fits a pattern. Following the Activision Blizzard takeover, the business further reduced its video game sector and let off 10,000 employees in January 2023 after hiring was prompted by the epidemic.

According to media reports, Microsoft declined to comment on the anticipated layoffs, and the precise number of cuts is still being decided.

Amazon CEO Echoing Similar Thoughts on Layoffs and Adaptation of AI

Amazon has alluded to additional layoffs in the upcoming years in a recent letter to its staff. In a recent letter to his staff, Andy Jassy, the CEO of Amazon, outlined a clear vision for the company's future.

According to the letter, there will be significant changes in the workforce as a result of the increased emphasis on artificial intelligence (AI), including possible cutbacks in corporate employment responsibilities.

Jassy underlined how AI is used throughout Amazon's extensive operations, pointing to its use in Alexa, shopping features, and internal operations. He described generative AI as a "once-in-a-lifetime" technical development that may open up new opportunities for businesses and consumers alike.