Microsoft Plans New Round of Layoffs in Sales Division Amid AI Restructuring
Microsoft is preparing for another significant round of job cuts, this time primarily targeting its global sales division, according to a Bloomberg report citing sources familiar with the matter. The layoffs, expected to impact thousands of employees, may be announced as early as next month, shortly after the tech giant closes its financial year.
This move comes just weeks after Microsoft cut around 6,000 jobs across various departments in May, signalling a broader restructuring effort as the company aggressively pivots toward artificial intelligence (AI) and cloud-based services.
Sales Teams in Focus, But Not Alone
While the upcoming layoffs are expected to affect sales roles the most, the report noted that other departments might also be impacted. The final scope and timing of the job reductions are still under discussion, and Microsoft has yet to make an official announcement.
The restructuring reflects a wider trend among big tech companies, which are streamlining operations amid economic uncertainty while investing heavily in emerging technologies like generative AI.
AI at the Centre of Microsoft’s Strategy
The job cuts align with Microsoft’s broader strategic shift toward AI. Over the past year, the company has deepened its investments in AI-driven solutions, largely through its partnership with OpenAI, the creator of ChatGPT.
As part of this pivot, Microsoft has committed to a massive capital expenditure plan worth approximately ₹6.6 lakh crore ($80 billion) for the current financial year. A substantial portion of this will be directed toward expanding its global data centre infrastructure, which is essential for supporting AI workloads and enterprise cloud services.
Company executives have repeatedly emphasized that AI is the future of Microsoft’s business model, and the current realignment of roles is seen as an attempt to optimize the workforce to meet that future.
Impact and Outlook
As of June 2024, Microsoft employed nearly 2.28 lakh people worldwide. While the precise number of layoffs in this round remains unclear, the cuts are expected to be in the thousands.
Industry experts view this as part of a necessary transition as Microsoft repositions itself in the high-stakes global race for AI leadership. However, it also raises concerns about job security in traditional roles as AI reshapes the structure of the tech workforce.
The company is expected to offer severance packages and support services to affected employees, as it has in past layoffs.
With growing investment in AI and cloud services, Microsoft’s long-term vision appears intact. But for thousands of employees, the coming month may bring a difficult reckoning.
IT.
