The reorganization memo released Monday didn’t mention any workforce reductions. But the changes will mean thousands of job cuts in areas such as field sales, said a person familiar with the restructuring.
Microsoft reorganized its sales and marketing operations in a bid to woo more customers in areas like artificial intelligence and the cloud by providing sales staff with greater technical and industry-specific expertise.
The company unveiled the steps in an email to staff Monday that was obtained by Bloomberg.
The memo didn’t mention any workforce reductions. But the changes will mean thousands of job cuts in areas such as field sales, said a person familiar with the restructuring who asked not to be named because the workforce reductions aren’t public. The company had 121,567 employees as of March 31.
Commercial sales will be split into two segments — one focused on the biggest customers and one for small and medium clients, according to the memo. Employees will be aligned around six industries — manufacturing, financial services, retail, health, education and government. They’ll focus on selling software in four categories: modern workplace, business applications, apps and infrastructure, and data and AI.
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Microsoft is in a pitched battle with companies like Amazon.com and Alphabet for customers who want to move workplace applications and data to the cloud, as well as take advantage of advances in artificial intelligence. The company, which has not dramatically overhauled its sales force in years, wants to tailor those teams better for selling cloud software rather than desktop and server solutions.
“There is an enormous $4.5 trillion market opportunity across our Commercial and Consumer businesses,” according to the email, which was sent by Worldwide Commercial Business chief Judson Althoff, Global Sales and Marketing group leader Jean-Philippe Courtois and Chris Capossela, the company’s chief marketing officer.
In the consumer and device sales area, Microsoft is creating six regions selling products like Windows software and Surface hardware, Office 365 cloud software for consumers and the Xbox game console. The group will also focus on new areas such as the internet of Things, voice, mixed reality and AI.
Microsoft will track metrics including large companies deploying Windows 10, sales of Windows 10 Pro devices and competition against Alphabet’s Chromebooks and Apple’s iPads.
Microsoft aims to expand its consumer business by creating “desire for the same creativity tools” that people have at work through Surface, Windows devices and Office 365, according to the memo.
“In addition, gaming is growing rapidly across all device types and is evolving to new scenarios like eSports, game broadcasting, and mixed reality content and we will drive growth in this category as well,” according to the memo.