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Microsoft Plans to Downsize, May Fire Thousands of Employees: Report

Chief Executive Satya Nadella has sought to reduce the tech giant's focus on software, shifting to cloud computing and business services.

AFP Relaxnews

Updated:July 4, 2017, 2:04 PM IST
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Microsoft Plans to Downsize, May Fire Thousands of Employees: Report
Representative Image. (Image: AFP PHOTO/JEWEL SAMAD)
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Microsoft is planning layoffs as it refocuses its sales force on making the software colossus a pivotal part of businesses relying on cloud computing, according to media reports. While many reports forecast the changes would result in thousands of job cuts, Microsoft on Monday only confirmed to AFP that changes were on the way. "Microsoft is implementing changes to better serve our customers and partners," a Microsoft spokesperson told AFP. Tech news website GeekWire published what it indicated were excerpts from the Microsoft memo, which referred to an enormous business opportunity helping its customers with "digital transformations."

Chief Executive Satya Nadella has sought to reduce the tech giant's focus on software, shifting to cloud computing and business services. "From large multinationals to small and medium businesses to non-profits all over the world, organisations are using Microsoft's cloud platforms to power their digital transformation," Nadella said when the company reported its earnings for the first three months of this year. Microsoft reported revenue gains in cloud and business service operations, which offset a drop in "personal computing," which includes the Windows operating system that once made up its core business. Microsoft said revenue from its "Intelligent Cloud" rose 11 percent from a year earlier to $6.8 billion.

Microsoft said its Office commercial products and cloud services revenue increased seven percent. Office consumer products and cloud services revenue rose 15 percent, as the number of Office 365 consumer subscribers increased to 26.2 million. Microsoft is to release its earnings for the recently-ended quarter on July 20. Microsoft's cloud platform, called Azure, faces competition from technology powerhouses Amazon and Google. Each of the companies has also been investing in artificial intelligence which can make services hosted in the Internet cloud more intuitive and insightful when it comes to handling data or catering to needs of users.

Redmond, Washington-based Microsoft has announced thousands of jobs cuts in recent years, the most severe being 18,000 positions eliminated in 2014 related from its acquisition of Nokia and failed efforts in the smartphone market. The technology giant cut 7,800 jobs in 2015, and 4,700 last year.

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