Microsoft Corp. reorganized its global sales group Monday to focus on cloud services, and a person familiar with the plans said the move will lead to layoffs in the thousands.
The company will target its sales efforts in two areas: large enterprise customers and small and medium businesses, according to an email sent to employees by Judson Althoff, executive vice president who works with partners to spread the adoption of Microsoft technology. Previously, Microsoft focused on commercial segments, such as the public sector, startups and specific industries.
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The email didn't mention layoffs. No notifications have gone out to employees, the person familiar with the plans said. The exact number of layoffs is unclear, though the cuts will hit staff in offices around the world, this person said. Microsoft had more than 121,000 employees at the end of March, the last time the company disclosed its head count.
News of the reorganization and pending layoffs were reported late last week.
Microsoft often reorganizes at the end of its fiscal year, which closed Friday. A year ago, a reorganization elevated Mr. Althoff and Jean-Philippe Courtois, executive vice president in charge of global sales, marketing and operations, to their current posts.
Microsoft is pressing to beef up its cloud-computing business to challenge cloud-infrastructure pioneer Amazon.com Inc. While Microsoft's Azure technology has emerged as the top competitor to Amazon Web Services, its 2017 sales likely will amount to just a quarter of its rival's, according to estimates from Deutsche Bank.
In his email, Mr. Althoff said the reorganization is intended to "align the right resources for the right customer at the right time."
The Redmond, Wash., company's sales group has long focused on selling packaged software and services to corporate buyers, which hasn't always necessitated specific technical expertise. Mr. Althoff wrote that he wants to boost "our technical depth and better align sales and services to solution areas."
With the new structure, Mr. Althoff's role is focused in part on working with partners such as software vendors and system integrators to convince customers to use Microsoft technology.
Write to Jay Greene at Jay.Greene@wsj.com
(END) Dow Jones Newswires
July 03, 2017 15:48 ET (19:48 GMT)