Cloud wars drive Microsoft to lay off thousands of staff

Announcement expected in days as global cloud spending is projected to grow to $162bn by the end of this decade.

Global public cloud provider Microsoft is reportedly readying the dismissal of thousands of employees across its regions to focus its salesforce on cloud technologies.

Speaking to TechCrunch, a source said the layoffs are expected to be announced this week or next, as well as the merger of Microsoft’s enterprise customer unit with one or more of the company’s divisions targeted at the SME space.

The news follows on from reports published last week by several US media who also cited sources who had spoken out on the major reorganisation.

Puget Sound Business Journal wrote that the global sales restructuration was imminent so that Microsoft could direct more of its efforts towards its cloud business.

The people familiar with the matter said the change would affect the Worldwide Commercial Business under Judson Althoff and Jean-Philippe Courtois’ global sales and marketing group.

The source continued to said the changes to be announced soon will be some of the most significant in the sales force in years.

The major sales realignment comes at a time when IDC projects global cloud spending to top $162bn by 2020, from $67bn in 2015.

Overall, the worldwide public cloud services market is expected to grow 18% from 2016 to 2017, achieving a market cap of $246.8bn, according to Gartner.

Microsoft has until now been lagging behind the world’s largest cloud provider AWS, however, its move to reshape its salesforce around cloud sales could prove game changing.

Back in March, investment-banking think tank Pacific Crest Securities’ Brent Bracelin lowered Amazon’s price target from $905 to $895 as the company faces fiercer competition in its cloud business, mainly from competitors such as Azure.