Reorganization in Microsoft

The giant tech company is slashing thousands of jobs, mostly in sales positions. Microsoft (MSFT, Tech30) confirmed the move in a statement, "taking steps to notify some employees that their jobs are under consideration or that their positions will be eliminated." "Like all companies, we evaluate our business on a regular basis," the spokesperson said. "This can result in increased investment in some places and, from time-to-time, re-deployment in others." The reorganization was announced internally on Monday.

Microsoft

Microsoft Corporation is an American multinational technology company headquartered in Redmond, Washington. It develops, manufactures, licenses, supports and sells computer software, consumer electronics, personal computers, and services.

In 1972, Paul Allen and Bill Gates founded their first company, named Traf-O-Data. Later, Gates and Allen officially established Microsoft on April 4, 1975, with Gates as the CEO.

Analysis

In 2014, Microsoft eliminated 18,000 positions related to 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.

The job cuts impact employees primarily outside the U.S. Microsoft did not specify the exact number of layoffs.

The reorganization came about a year after JP Courtois and Judson Althoff were promoted to lead the company's global sales and marketing operations and its worldwide commercial business following the departure of former Chief Operating Officer Kevin Turner.

Since taking over as Chief Executive in 2014, Satya Nadella has sharpened the company's focus on its cloud computing unit to counter a prolonged slowdown in the PC market.

Cloud computing involves companies storing files and programs in big data centres so they can be accessed anywhere, not just on individual computers. Microsoft wants to target its sales operations better in an effort to attract businesses looking to shift storage and other parts of their businesses online to the cloud.

Many companies have been investing in artificial intelligence which can make services hosted in the internet cloud. It is more intuitive and insightful when it comes to handling data or catering to needs of users.

Assessment

Our assessment is that, technological companies are compelled to reengineer their business rapidly and this could make some of the employees redundant. In the case of Microsoft, they are migrating their business into the cloud computing sector and this has resulted in elimination of number of people working in the sales sector.