Microsoft is reportedly preparing to eliminate thousands of positions, with sales teams expected to bear the brunt of the reductions, as the technology giant continues reshaping its workforce whilst investing heavily in artificial intelligence infrastructure.

According to Bloomberg, the cuts are anticipated to be announced early next month following the conclusion of Microsoft's fiscal year, citing sources familiar with the matter. The reductions will not exclusively target sales departments, and the timing remains subject to change, said the sources, who requested anonymity when discussing private company matters.

The planned terminations would represent the latest in a series of workforce reductions at the Redmond-based company. In May, Microsoft eliminated approximately 6,000 positions, with those cuts primarily affecting product and engineering roles whilst largely preserving customer-facing positions in sales and marketing departments.

The company has been systematically restructuring its operations as it channels substantial resources into artificial intelligence development. Microsoft has allocated $80 billion in capital expenditure for this fiscal year, with the majority earmarked for expanding data centres to address capacity constraints for AI services.

In April, Microsoft informed employees of plans to increasingly rely on third-party firms to handle software sales to small and medium-sized customers, signalling a shift in its sales strategy.

The technology sector has witnessed widespread workforce reductions as companies balance massive AI investments with cost management pressures. Amazon chief executive officer Andy Jassy indicated on Tuesday that the deployment of generative AI and automated agents would reduce the company's total corporate workforce over the coming years.

Microsoft regularly evaluates its organisational structure to ensure optimal investment allocation for growth opportunities. As executives commit tens of billions of dollars to servers and data centres, they have assured Wall Street investors and cautioned employees about maintaining spending discipline in other operational areas.

The company employed 228,000 workers as of June 2024, with 45,000 of those positions in sales and marketing divisions. Microsoft typically implements team restructuring and announces organisational changes near the end of its fiscal year, which concludes in June.

The latest workforce reduction comes as technology companies across the industry accelerate artificial intelligence integration into their products and services to maintain competitive advantages in rapidly evolving markets.

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