With technology giant Microsoft confirming that the company is undergoing a realignment exercise, media is abuzz with reports of impending mass lay-offs. The company is looking to increase its emphasise on cloud services, which means that Microsoft will not require too many physical staff members to service their customer accounts.
“Microsoft is creating a new commercial and consumer model in order to best align the right resources for the right customer at the right time. This will enable our commercial customers to get even more value from our offerings and to drive success, as well as their own digital transformation,” said Microsoft in its statement.
While reports had suggested that the company is planning to lay off people in the sales and marketing team on a global scale, what remains unclear is if Microsoft India will have an immediate impact.
The current rejig stems from the realisation that it is redundant for Microsoft to maintain a large physical sales workforce to deal with its customers who are predominantly large and medium enterprises (SMEs), say sector experts. Earlier Microsoft used to sell packages to their customers, and the sales and marketing team had to frequent these customers on a regular basis. However, with the advent of a cloud-based infrastructure, everything can now be done on the cloud which involves virtual servers.
“A customer can just log in to the system and access every service through the cloud infrastructure. Package renewal, sales and services could be done online through the cloud. There is online customer support and hence, there is no requirement for a large physical sales and service workforce. And hence, a few hundreds of Microsoft's sales and marketing people stand to lose their jobs in India as well,” said Kris Lakshmikanth, the founder of Head Hunters India Limited.
The move will help Microsoft chart its growth path and emphasise on productivity, thereby increasing its market value, which will indeed boost Microsoft's share prices.
“To begin with, sales and marketing employees will go, but eventually the R&D and other teams will also get affected. Today, Microsoft does not command the monopoly as it has competition in the form of Google, Facebook and Amazon,” added Lakshmikanth.
Microsoft incurs about 70 per cent of its costs on sales and marketing in the form of branding and marketing campaigns, while only 30 per cent is spent on R&D.