MOSCOW, November 1 (RIA Novosti) – Microsoft's Advertising global sales team is facing redundancy, as a part of the latest round of large-scale layoffs, with company expecting to release up to 18,000 workers.
"We've taken another step that will complete almost all the 18,000 reductions announced in July. The reductions happening today are spread across many different business units, and many different countries," a Microsoft spokesperson told Business Insider.
Microsoft has already closed both its Global Agencies and Accounts team, responsible for communications with top media agencies, and Yarn, the company's "creative group that collaborates, ideates, incubates and customizes highly immersive ad experiences made possible by Microsoft technology," CRN, the tech news web site reported on Thursday, October 30. A day later, Business Insider revealed that the company had fired its entire global Advertising team, which was "selling advertising space across Microsoft's MSN, Bing, Xbox, Outlook, Skype, and Windows 8 properties." CRN notes that it remains unclear whether the employees were laid off or redirected to others Microsoft's units, adding that the IT giant "could not be reached" for further comments on the issue.
Experts stress that the advertising team layoff will seriously affect Microsoft's competitiveness, noting that companies such as Oracle, Salesforce.com, Google are steadily improving their marketing portfolios. Furthermore, Microsoft is evidently risking loss of a prospective market niche.
"For Microsoft to lose that muscle, connecting with the agencies and CMOs making technology buying decisions, is a big deal. Oracle and Salesforce.com have been building marketing channels for years. They now have the tools and technology to go from the CRM system all the way out to touch the actual customer," an unnamed source told CRN, speaking on condition of anonymity.
On the other hand, according to the eMarketer figures, Microsoft only has a 2-3 percent share of the worldwide digital ad market, while Google dominates with a 31 percent share and Facebook accounts for about 8 percent. "Microsoft's display-ad business has grown increasingly insular over the past few years, which may be to blame for its declines," AdAge, a global advertising news agency points out.
CRN's unnamed source deems that Microsoft A&O (Advertising & Online) had eventually turned into a "dead horse": "Where are the relevant players in advertising today? Google and Facebook. Then you have Microsoft A&O, which has been losing talent and is seen in the space as a dead horse."
However, Business Insider underscores that the executive team of the Microsoft Advertising division is still "on board" and that could mean the IT giant is not ready to leave the prospective global digital ad market yet.
