Update: Microsoft is said to be laying off up 3,000 sales employees with a majority of the positions coming from worldwide offices according to CNBC. "Like all companies, we evaluate our business on a regular basis", a Microsoft spokesperson says.
In total, server products and cloud services revenue are up 14 percent, with Azure revenue growing by 93 percent in the recent quarter. Cloud sales, by comparison, have almost doubled. When asked about cuts during a conference call, Microsoft President Brad Smith had no comment on Thursday.
"Microsoft is implementing changes to better serve our customers and partners", a Microsoft statement explains.
Going forward, Microsoft plans to "use employees who are more knowledgeable about specific verticals so they can sell bigger packages", the report notes.
The layoffs come at a hard time for Microsoft, as a major shift in strategy is forcing the company to rethink its identity. It allows companies to do everything from hosting websites and email to streaming favorite videos and delivering on-demand software.
Chief executive Satya Nadella has sought to reduce the tech giant's focus on software, shifting to cloud computing and business services.
CNBC reported that layoffs would cut up to 3,000 employees. This move has perhaps been taken keeping in mind the growth of their cloud computing business.
Microsoft has confirmed a layoff that was first rumored earlier this week.
Microsoft has notified some employees about the reductions, a source said.
This year's cuts could affect as many as 3,000 people, according to CNBC. Microsoft's commercial cloud run rate hit $15.2 billion during the March quarter, up from $14 billion in the previous quarter.
Microsoft completed its $26 billion acquisition of the professional social network LinkedIn late past year as part of its new strategy.