In yet another proof that job security doesn’t exist anymore, tech giant Microsoft is planning to lay off thousands of employees – worldwide. Despite earning US$23.56 in revenue and net profit of US$5.7 billion for the quarter ended March 31, 2017, Microsoft would not think twice about retrenching its employees, if that would bring more profit to the shareholders.
Microsoft Corporation, with a market capitalization of nearly US$1 trillion (US$959.38 billion), is scheduled to execute a major global sales reorganization – as soon as this week. Back in January 2017, the company said it would cut 700 jobs. But last week, the Puget Sound Business Journal revealed that a major restructuring is to be announced on July 5, a day after Fourth of July holiday.
The major restructuring is a result of new executives Judson Althoff and Jean-Philippe Courtois taking over Microsoft’s sales and marketing divisions, following the exit of long-serving COO Kevin Turner last summer. At first, it might sound that only sales would be affected, but anyone not in the Microsoft Azure could be axed too.
Azure, the Microsoft’s cloud computing service, has been doing a roaring business. Microsoft Azure‘s revenue nearly doubled in the company’s latest fiscal quarter, with 93% sales growth. As the product competes fiercely with Amazon Web Services, Microsoft is expected to put more sales and technical resources in the area.
Those lucky enough to keep their jobs would probably see a different sales and management direction in an organizational merger that involves its enterprise customer unit and one or more of its SME-focused divisions. The restructuring will be so massive that Bloomberg said the redundancies would be “some of the most significant in the sales force in years.”
Salespeople who could save their job will have a steep learning curve ahead, if they wish to keep their job under a new commander – commercial business chief Judson Althoff. The new Microsoft strategist has been critical of previous sales approaches. Althoff, a former Oracle executive who joined Microsoft in 2013, said the salespeople have been selling Azure like fries on top of a hamburger set.
Althoff has publicly criticised the old sales method adopted by previous Microsoft Chief Operating Officer Kevin Turner. The Microsoft salespeople, accustomed to the company’s on-demand processing power and data storage products, didn’t know how to position Azure as a useful service to customers. They just used a sell-it-and-forget-it model of pushing software licenses.
With the departure of COO Kevin Turner, of whom was bloated with tons of portfolio including sales, internal information-technology team, operations, foreign subsidiaries and even a part of corporate finance, Chief Executive Satya Nadella broke up the organization. Marketing head Chris Capossela would lead consumer-focused sales.
Althoff, who previously led Microsoft’s North American sales, would take on worldwide commercial and government sales, as well as the company’s business advisory and developer outreach teams. Meanwhile, Jean-Philippe Courtois took charge of the company’s sales-focused subsidiaries. Operations and finance units went to other groups.
The segregation of jobs would mean Microsoft will not (hopefully) be burdened with inefficiency whereby its chief had more than 50,000 people reported to him, as in the case of Kevin Turner. Still, this is not the first time Microsoft has been retrenching its staff. Mass layoff has been so common in Microsoft that it’s almost like an annual ritual.
In 2014, Microsoft cut 18,000 jobs (about 14% of its full-time workforce); it’s biggest in the company’s history, surpassing the previous record of 5,800 in 2009. At least 12,500 of those jobs were related to Microsoft’s acquisition of Nokia’s mobile phone business. A year later in 2015, it fired 7,800 employees, and last year, the company announced 2 rounds of cuts – 1,850 in January and 2,850 in July.