The planned restructuring could be announced this week and is likely to involve some significant job cuts, according to reports by Puget Sound Business Journal and Bloomberg last week. The reorganization will include a merger between its enterprise customer unit and one or more of its SME focused divisions, a source said to TechCrunch.
Microsoft representatives declined to comment about job losses related to the reorganization. Although it is still a priority for the company to sell the software on its desktop computers and laptops, Microsoft's new target focuses on getting consumers sign up to the service itself. The company has been trying to get its salesforce to convert more purchases of these products as the technology industry as a whole moves to the cloud-first model. The company has previously announced workforce changes at the beginning of a new fiscal year.
The reports are in line with Microsoft's announcement last August, when it revealed plans to cull 2,850 global sales staff. Cloud revenue per employee is lower than the company would like, some people close to the matter said.
"Microsoft is implementing changes to better serve our customers and partners", a Microsoft spokesperson told AFP.
The departures of several employees this time are largely due to Microsoft shifting its focus to the cloud services, which will result in many from the sales group having to leave the company. It comes as Microsoft ends its 2017 financial year, with the FY2018 beginning on July 1.
And if judging by Microsoft's stock price over the past five years (up 125.34%), during which the shares have risen by an average of 25%, Nadella's goal of injecting fresh blood into key divisions have paid off handsomely. Nadella said, "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". Company executives have now communicated to employees, via a memo, that there will be a shake-up in its sales and marketing teams but, interestingly, didn't mention the rumored layoffs.