Microsoft Corp. is laying off thousands of employees in a shake-up aimed at selling more subscriptions to software applications that can be used on any Internet-connected device.
Most of the people losing their jobs work in sales and are located outside the United States. The Redmond, Wash.-based company confirmed that it began sending the layoff notices Thursday, but declined to provide further specifics except that thousands of sales jobs will be cut.
“Like all companies, we evaluate our business on a regular basis,” Microsoft said in a statement. “This can result in increased investment in some places and, from time to time, re-deployment in others.”
Microsoft employs about 121,500 people worldwide. Nearly 71,600 of them work in the U.S.
The job cuts are part of Microsoft’s shift away from its traditional approach of licensing its Office software and other programs for a one-time fee tied to a single computer. The company is now concentrating on selling recurring subscriptions for software accessible on multiple devices, a rapidly growing trend known as cloud computing.
That part of Microsoft’s operations has been playing an increasingly important role, especially among corporate and government customers, since Satya Nadella succeeded Steve Ballmer as the company’s chief executive in 2014.
Microsoft’s “commercial cloud” segment is on a pace to generate about $15 billion in annual revenue. More than 26 million consumers subscribe to Microsoft’s Office 365 service, which includes Word, Excel and other popular programs. That number has more than doubled in the last two years.
Meanwhile, revenue from licensing of Microsoft’s Windows operating system has been increasing by 5% or less in the last three quarters.
Microsoft stock fell 0.7% on Thursday to $68.57 a share.
1:40 p.m.: This article was updated with a comment from Microsoft, information about Microsoft’s finances and the company’s stock movement.
This article was originally published at 12:45 p.m.