In an internal email last week, Judson Althoff, a Microsoft executive vice president, described the reorganization and its rationale. He wrote that there was “an enormous $4.5 trillion market opportunity” for Microsoft in the coming years.
The sales and marketing changes, Mr. Althoff wrote, were intended to “enable us to align the right resources for the right customer at the right time.” Key areas of opportunity, he said, included expanding its cloud offerings in data analysis and artificial intelligence, and helping companies in every industry to become digital businesses, using Microsoft tools.
Microsoft’s global head count is 121,500, a number that has increased in the last few years.
The one major work force cutback at Microsoft came in 2014, when 18,000 jobs were eliminated.
That followed shortly after Satya Nadella succeeded Steven Ballmer as chief executive. Mr. Nadella quickly determined that Microsoft’s $7.2 billion acquisition of Nokia’s mobile phone business in 2014 was a failure and started selling off pieces and closing it down. Most of the jobs cut at the time were related to Nokia. A year later, Microsoft took a $7.6 billion write-off.
Microsoft is competing with Amazon, Google and other major technology companies, like IBM and Oracle, in the fast-growing business of delivering software as a cloud service instead of as traditional software loaded onto computers.
Under Mr. Nadella, Microsoft has made that transition to cloud software delivery, and its personal computer software business is no longer considered an engine of growth.
New capabilities are being built into the cloud services, notably big data analysis and artificial intelligence. And businesses require specialized cloud software, tailored for their industry.
The Microsoft email last week said the reorganization was intended to sharpen its focus on “six priority industries”: manufacturing, financial services, retail, health, education and government.
Sales and marketing jobs in the future will often require more technical and industry-specific knowledge than before, Mr. Shaw said. The reorganization and job cuts, he added, were an effort to match the company’s skills with the changing marketplace.