Microsoft to replace sales roles with AI-focused engineers as 9,000 employees face layoffs

According to the recent report, Microsoft's recent job cuts have fallen particularly hard on traditional sales roles, many of which are being replaced by technically-skilled "solutions engineers".

In Short

• Microsoft to replace traditional sales roles with AI-focused engineers
• The tech giant is now focusing on embedding Copilot to its services to compete with OpenAI and Google
• Microsoft recently announced 9,000 job cuts

In a move that underscores just how serious the AI race has become, Microsoft is sharpening its sales playbook. After confirming the fresh wave of layoffs, Business Insider has reported that the tech giant is also considering replacing the sales team with AI-focused engineers. To recap, the tech giant has confirmed that it is laying off close to 9,000 employees, just under 4 per cent of its global workforce. And at the heart of it all? A complete rethink of how the company pitches its AI tools to customers.

As per the report by Business Insider, the company’s internal plans and documents say the job cuts have fallen particularly hard on traditional sales roles, many of which are being replaced by technically-skilled "solutions engineers". Unlike their predecessors, these engineers won’t just sell a dream — they'll demo it. “The customer wants Microsoft to bring their technical people in front of them quickly,” the report stated. “We need someone who is more technical, much earlier in the cycle.”

It’s part of a bigger strategic shift, prompted by increasing pressure from rivals OpenAI and Google, both of whom are competing for dominance in the rapidly expanding enterprise AI space. Microsoft’s new approach is all about simplicity and impact. The report noted that the firm wants to cut through the noise and get straight to the code or at least a hands-on demo, much faster. The days of layered sales teams and endless introductory calls could soon be over.

In a memo circulated the day before the cuts were announced, Microsoft’s sales chief, Judson Althoff, outlined a bold new vision to turn the company into “the Frontier AI Firm.” He stressed the need for “continued agility” and spoke of “reinventing Microsoft and MCAPS”, the company’s Customer and Partner Solutions division.

Among his top priorities? Embedding a “Copilot on every device and across every role.” If that sounds like a sweeping mission, that’s because it is.

But that’s not all. Slides obtained from an internal April presentation revealed plans to halve the number of Microsoft’s sales “solution areas.” Previously there were six: Modern Work, Business Applications, Digital & App Innovation, Data & AI, Azure Infrastructure, and Security. As of the new fiscal year (which began on July 1), those have been streamlined into just three: AI Business Solutions, Cloud & AI Platforms, and Security.

The idea is to make it easier for both customers and sales teams to navigate Microsoft's sprawling AI product portfolio. The feedback from clients was clear, they were talking to far too many people before anyone showed up with real tech. So, Microsoft is now hiring more field sellers and sending technically-minded staff out to the front lines.

And while the annual July shake-up is par for the course, it coincides with Microsoft’s new fiscal year, this year’s round of cuts stands out. The layoffs come amid soaring AI investments, and this sales overhaul is part of the broader cost-balancing act.

For Microsoft, this isn’t just about restructuring, it’s about survival in a fast-moving industry. In a world where AI is king, the company wants fewer PowerPoint decks and more Python scripts. By replacing chatty sales specialists with code-savvy engineers, Microsoft hopes to better win over businesses ready to embrace the next era of enterprise tech.

- Ends