June 17, 2024

Microsoft Closes Sales Unit, Cuts More than 1,000 Jobs in New Round of Layoffs: Report

Microsoft announced plans in January to lay off 10,000 employees in the coming months.


  • It has been reported that the ‘Digital Sales and Success’ group has been shut down
  • Microsoft is also said to have dissolved the customer solutions manager position
  • The tech giant announced 276 job cuts in Washington state last week

Tech giant Microsoft has reportedly laid off more than 1,000 employees in the past week, with the latest cuts surpassing the 10,000 layoffs the company announced earlier this year.

People familiar with the situation who asked not to be identified discussing sensitive matters said Inside Wednesday that most of the recent cuts have affected customer service and sales positions.

As part of the changes, Microsoft has shut down its “Sales and Digital Success” group — a sales and customer service unit that at one point had thousands of staff, the outlet reported.

While the cuts mainly affected customer service and sales roles, there were some reductions among engineering project managers and marketing departments, the outlet added. The customer solutions manager role was reportedly disbanded, and some influential employees were moved to customer success account management, but not many.

Two people told Insider that many managers were not aware of the plans, as Microsoft’s leadership was relatively quiet about the changes this time around.

“The focus is more on accelerating consumption than helping customers. What was promoted as one of the largest customer service groups in the industry is now struggling to keep up with demand,” one person familiar with the matter told the outlet.

During this week’s workforce reductions, some employees criticized Microsoft’s chief commercial officer, Judson Althoff, for not giving more details about the layoffs and a scheduled sales launch event this year, according to internal messages shared with Insider.

In particular, one internal post related to the event included a question about whether to replace the axial sales team with AI tools.

Microsoft did not immediately respond to the International Business Times’ request for comment.

Last week, Microsoft disclosed in a Worker Adjustment and Retraining Notice (WARN) filing that it laid off a total of 276 employees at its Redmond and Bellevue offices, both in Washington state. Geekwire reported that 210 employees were laid off in the Redmond office, and 66 employees who were working remotely from the Bellevue office.

“Organizational and workforce adjustments are a necessary and regular part of managing our business. We will continue to prioritize and invest in areas of strategic growth for our future and to support our customers and partners,” Microsoft said in a statement at the time.

In January, backer OpenAI announced plans to cut 10,000 jobs, citing the economic downturn that has gripped the tech sector since last year. The company laid off nearly 1,000 workers in October 2022 following a decline in earnings.

News of Microsoft’s latest cuts came after Morgan Stanley released bullish statements about the tech giant’s investments in artificial intelligence.

Earlier this month, Morgan Stanley analyst Keith Weiss said that generational AI “looks to significantly expand the scope of business processes that can be automated with software, and Microsoft is in the best position in software to monetize that expansion.”

The investment banking giant said Microsoft had a “pole position” in the AI ​​generation race, offering a potential 22% upside that could allow the company to join Apple in the $3 trillion valuation club.

Just last week, Microsoft announced the expansion of its partnership with accounting giant KPMG, which will include AI solutions for clients. “The capabilities of the Microsoft cloud and Azure OpenAI Service will empower KPMG’s global workforce of 265,000 to unleash their creativity, provide faster analysis and spend more time on strategic advice,” the tech giant said in its press release.

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