Microsoft targets sales teams in new layoffs of almost a thousand workers

Microsoft Corp. plans to reorganize its sales force amid the tech giant’s transition to focus on its fast-growing cloud-computing business. The reorganization will include an unspecified number of layoffs.

The planned reorganization could result in thousands of layoffs, said someone familiar with the arrangements. The cuts are expected to be announced in early July, not long after the end of the tech giant’s fiscal year in June.

Microsoft targets sales teams in new layoffs

Microsoft sales teams are expected to be hit hardest, but it won’t be the only division affected by layoffs. Sources note that the timing and final scope of the layoffs could still change. The company has not yet commented on the matter.

The move indicates that Microsoft is trying to streamline its operations as it plows tens of billions of dollars into artificial intelligence and cloud infrastructure. Executives have assured investors that they can keep a line on operating expenses even as they participate in the AI spending spree.

The pending cuts come after the company laid off roughly 6,000 employees in May, trimming mostly engineering and product roles. Those layoffs left untouched most customer-facing positions, like sales and marketing.

In April, Microsoft announced a change in sales strategy, telling employees it would lean more heavily on third-party companies to sell software products to small and midsize businesses.

As of June 2024, Microsoft had a global workforce of about 228,000 people, 45,000 of whom worked in sales and marketing. The firm typically makes internal reorganizations at year-end.

Microsoft said it regularly evaluates its structure to align with long-term growth plans.

Meta cuts VR jobs while competing to poach AI talent with $100M offers

Meta is also letting go of over 100 employees in its Reality Labs division, which manages virtual reality and wearable technology. The job cuts affect employees developing VR experiences for Meta’s Quest headsets and staff working on hardware operations to streamline similar work between the two teams.

Despite the staff reduction plans, OpenAI CEO Sam Altman says Meta has offered his employees bonuses of $100 million to recruit them, as the tech giant seeks to ramp up its artificial intelligence strategy.

The alleged attempts by Meta to hire OpenAI staffers are the latest signs of a frenzy to hire top engineers to develop AI models, and they come at a time when the Facebook owner is working on building its superintelligence unit to catch up with competitors.

Amazon is another firm that is planning the next round of layoffs. In a message to employees shared Tuesday, Amazon CEO Andy Jassy talked highly of the company’s embrace of artificial intelligence tools across the company. 

He noted that the company will ultimately reduce the total corporate workforce as it gains efficiency over time. That is only slightly veiled corporate speak for “get ready to be replaced.”

Jassy referred to generative AI as a “once-in-a-lifetime” technology that will change how the company operates, and said Amazon is already using it in “virtually every corner of the company.” 

According to Jassy, Amazon already has over 1,000 Generative AI services and applications in progress or built, and said, “That’s a small fraction of what we will ultimately build.” So it’s clear the company is all in on AI. Amazon said it would commit $100 billion to investing in AI technologies this year.

Last year saw more than 150,000 job cuts across 549 companies, according to independent layoffs tracker Layoffs.fyi. So far this year, more than 22,000 workers have been the victims of reductions across the tech industry, with a staggering 16,084 cuts in February alone.