Microsoft Has Confirmed Reports of a Mass Layoff

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On Thursday, Microsoft (NASDAQ:$MSFT) disclosed its plans to cut roughly 10% of its global sales force.

As of right now, there are about 50,000 people in the Microsoft sales organization, which means that up to 5,000 jobs could be cut. However, according to a CNBC report, it’s likely that this number will be closer to 3,000.

Microsoft informed its employees on Monday that the layoffs are a part of a corporate reorganization. The technology company plans to restructure its global sales force in an attempt to refocus the group in selling its cloud-computing services.

Those working in Microsoft’s sales organization will be the primary targets of the layoff, but it will also affect employees in related groups, such as finance and legal departments. According to a person close to the company, these layoffs will be the only round linked to this particular restructuring.

Not surprising, the decision to restructure the sales team comes about a year after the departure of COO Kevin Turner, who was in charge of Microsoft’s sales organization. The reorganization is a clear indication that the company is following CEO Satya Nadella’s decision to change the way Microsoft does sales in an attempt to better support its Azure and Office 365 cloud-computing businesses.

It’s fair to say that employees were not completely taken back by the announcement since the company’s fiscal year ends on June 30, and it tends to announce reorganizations and layoffs at the start of July.

Microsoft has yet to disclose what kind of severance it would offer to affected employees or whether it would take a financial charge linked to the reorganization.

On Thursday’s trading session, Microsoft’s stock was 58 cents (less than 1%) to $68.

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About the author: Caroline Harris is a third-year student at Capilano University in North Vancouver, Canada. Having already completed an Associates Degree in Psychology, Caroline is now finishing her Bachelor's degree in Communications. In preparation for working in the advertisement sector, Caroline is writing financial content and analysis. On a daily basis, Caroline works on articles regarding the following topics: finance, cryptocurrency, technology, and politics.