Internal Microsoft memo lays out its new strategy for selling AI as the company cuts salespeople

• Microsoft's Judson Althoff wants to revamp sales to become the "frontier AI firm," a memo shows.

• The changes come as Microsoft cuts thousands of roles, including in sales.

• Althoff's memo outlined the changes to the organization and his ambitions for the new fiscal year.

Microsoft's sales chief, Judson Althoff, is revamping his unit to make it more AI-focused, according to an internal memo viewed by Business Insider.

Althoff, the company's chief commercial officer, sent the memo to the sales unit, called Microsoft Customer and Partner Solutions (MCAPS), a day before the company announced a significant round of layoffs.

Those layoffs affected many salespeople in Althoff's organization, sources familiar with them said. The memo did not mention the layoffs, announced beginning July 2 in separate communications to employees.

Althoff's memo called for "continued agility" and "reinventing Microsoft and MCAPS" to become "the Frontier AI Firm," and outlined the five priorities of the sales organization:

1. Establish a Copilot on every device and across every role

2. Strengthen our M365 and D365 execution and penetration across all segments

3. Create meaningful AI design wins

4. Grow our cloud platform business by migrating and modernizing workloads to Azure

5. Build a cybersecurity foundation to enable secure AI Transformation

Althoff in April unveiled plans to slash the number of the sales team's "solutions areas" by half during the next fiscal year, which started July 1.

BI obtained copies of slides from Althoff's April presentation, showing the company planned to condense its six previous areas into three: AI Business Solutions, Cloud & AI Platforms, and Security, according to those slides.

AI Business Solutions will focus on getting "Copilots on every device across every role" and on selling Microsoft 365's suite of business applications and Dynamics 365 customer relationship management service, according to the July 1 memo.

Cloud & AI Platform will include the company's Azure business, its AI "agent factory" Foundry, and data analytics platform Fabric. That group will be focused on frontier AI solutions and migrating and modernizing cloud workloads to Azure.

Security focuses on selling Microsoft's security tools. "We have spent a lot of time playing defense over the last year, and it is now time to compete more aggressively," Althoff said, referring to the security solutions area.

The changes come as Microsoft faces increasing competition for enterprise customers in AI from companies like OpenAI and Google. Microsoft has an advantage in that many large companies already use its other tools, but many of those companies' employees want the more well-known ChatGPT.

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