Microsoft reportedly planning new round of layoffs with sales roles likely to be hit – News

Microsoft Corp. is reportedly planning to lay off several thousand employees next month, in what will be the latest round of job cuts in tech amid changing markets and the rise of artificial intelligence.

Bloomberg, referencing people familiar with the matter, says that the cuts are currently planned to be timed after the end of Microsoft’s fiscal year which ends June 30, though the timing may change. The cuts are expected to particularly impact the company’s sales teams, although they won’t be limited to that division

The new layoffs, if they happen, will be the second major round of layoffs by Microsoft this year, after the company laid off around 6,000 people, or 3% of its workforce, in May. As of June, Microsoft reportedly has 228,000 workers, with 45,000 of them working in sales and marketing.

If and when the job cuts happen, it won’t be a complete surprise that they will primarily target employees in sales, as Microsoft Chief Commercial Officer Judson Althoff told employees in April that the company planned to use third-party firms to handle more sales of software to small and mid-size customers. Althoff also said at the time that Microsoft’s in-house sellers will also be expected to offer a wider array of products rather than having narrow specializations.

While Microsoft has not commented on the report that it was planning new layoffs, a company spokesperson, in a way, already described what Microsoft’s plans were back in April.

“We are evolving the commercial solution areas within our sales organization to better reflect the era of AI and support the growth of our customers and partners,” the Microsoft spokesperson said. “This evolution reflects the shift in how customers and partners are buying and will better serve their needs.”

Microsoft isn’t the first tech company to announce layoffs this year and it won’t be the last, as various firms adjust their employee mix as AI reshapes customer services, sales, development and various other sectors. Put more simply, AI is hitting a tipping point where it is now replacing low-level employees.

Other companies that have announced job cuts this year include Autodesk Inc. – 1,350 employees in February; in April – Google LLC – several hundred employees, Meta Platforms Inc. – more than 100 and Intel Corp. – more than 20,000; and CrowdStrike Holdings Inc. – around 500 in May.

More recently, Amazon.com Inc. Chief Executive Officer Andy Jassy said that his company’s workforce is likely going to become much smaller in the future as more tasks are performed by generative artificial intelligence tools and AI agents.

In a memo to employees, Jassy said the company expects it will need “fewer people doing some of the jobs that are being done today and more people doing other types of jobs”. He added that it’s difficult to forecast where this will net out over time, though he said he’s almost certain that AI will ultimately “reduce our total corporate workforce.”

To his credit, Jassy has been candid about the impact of AI on Amazon’s workforce. As AI continues to climb a J-curve in technological advancement, more companies, not just in tech, will likely be forced to make similar decisions.

Image: News/Reve