Tech employees being sacked by the thousands

11:15 | 07/07/2017
A series of major layoffs are on the horizon as tech companies aim to cut costs and lift revenue, even after cutting thousands of jobs in recent years.
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According to TechCrunch, Microsoft is planning to lay off thousands of employees worldwide in a move to reorganise its sales force.

The move, which also involved merging its enterprise customer unit and several divisions focused on small- and medium-sized enterprise customers, will be announced next week, according to a source familiar with the change. Microsoft declined to comment.

According to Bloomberg, Microsoft wants to better focus on selling cloud software. The company's sales force has been trained for years to sell software for use on desktop and servers. Now it is more important to convince customers to sign up for cloud services hosted in Microsoft's data centres.

This came as the result of a leadership change at Microsoft last year, according to Tech Crunch. Judson Althoff and Jean-Philippe Courtois took over the sales and marketing functions to replace long-time chief operating officer Kevin Turner.

Last July, Microsoft said it would lay off 2,850 people, including 900 working at in sales functions. Just two months prior to that, the company also cut 1,850 jobs in its smart phone businesses, according to Business Insider.

These layoffs were part of an earlier plan to cut 7,800 positions, which Microsoft announced after acquiring Nokia for $7.6 billion.

Beside Microsoft, several other technology companies also plan to reduce their workforces.

According to The Street news website, in April 2016, Intel cut 11 per cent of its workforce (12,000 employees) when it switched focus from PCs to cloud computing and the Internet of Things. The company said the layoffs would save $750 million in 2016 and $1.4 billion each year.

This May, Cisco Systems Inc. said it would lay off another 1,100 employees in addition to the 5,500 people (7 per cent of the workforce) it announced letting go last August. The company projected fourth-quarter revenue to fall 4-6 per cent.

Meanwhile, IBM terminated 5,000 employee contracts in March 2016 after four years of running deficit. According to Fortune magazine, the company had another round of layoffs in May, but the number of affected employees was not disclosed.

Last June, Bloomberg reported that LM Ericsson Telephone was also planning to lay off 3-4,000 employees, but the real number could reach up to 25,000 people, one-fifth of the entire company. This is considered a direct result of intense competition and falling sales.

HP could not escape this trend, either. Last October, the company said it would let go 3,000-4,000 employees, or 6 per cent of its workforce, over the course of three years. It hoped to save $200-300 million per year starting from 2020.

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