Microsoft 'may shed thousands of jobs in cloud refocus'

Another July reorganisation is rumoured for Microsoft, this time to strengthen cloud sales

Microsoft is set to cut thousands of jobs globally, reports suggest, restructuring to focus on sales of its cloud products.

One source told TechCrunch that the alleged layoffs were centred on restructuring that will see an enterprise unit merge with an SMB-focused division. A separate report from Bloomberg suggested Microsoft was reorganising to put more attention on its cloud software, citing sources familiar with the matter.

Microsoft is expected to make the announcement later this week. The mid-year restructure is becoming common at Microsoft, with job cuts and reorganisations hitting in 2015 and 2016. In 2013, the company restructured its major divisions and executive lineup.

This year's reorganisation looks set to strengthen Microsoft's focus on its increasingly lucrative cloud division potentially a wise move following its latest results announced at the end of April, with its hardware business struggling as cloud surged. The company's annual cloud revenues topped $15 billion, with its Intelligent Cloud division climbing 11% and sales for Azure up 93%.

Microsoft executives have previously suggested the company was shifting how it sells cloud products. In an interview with the Seattle Times last year, executive vice president of the Worldwide Commercial Business organisation, Judson Althoff, said Microsoft had mistakenly been selling its Azure cloud services the same as standard software.

"It was a flawed strategy to try to sell Azure like, Do you want fries with that?' " Althoff told the newspaper. "But it isn't our approach today." He said Azure was now becoming an "anchor tenant" for corporate and government sales.

Microsoft hasn't yet replied to IT Pro's request for comment.

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