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With cloud computing becoming a bigger revenue driver for Microsoft Corp. (MSFT), the company reorganized its business earlier this week, which resulted in large-scale job reductions at the software company.

A person familiar with the companys plans told The Wall Street Journal earlier this week that layoffs could be in the thousands range as it moves its sales focus to large enterprises and small and medium businesses. Late last week, the Puget Sound Business Journal broke the news that Microsoft would reorganize its business to focus on a so-called cloud-first strategy that is being led by Azure, its cloud hosting business.

According to reports, most the layoffs will be in the sales division and outside of the U.S., and the number of layoffs is estimated to be between 3,000 and 5,000. Microsoft has not confirmed any of these numbers, but has confirmed the process of informing employees has started.

In an email sent to employees Monday that was obtained by the Journal, the company said its sales efforts will focus on businesses instead of going after specific industries or market segments like startups or public companies. In the email sent by Judson Althoff, the executive vice president who pushes Microsofts technology, he said the sales reorganization is designed to align the right resources for the right customer at the right time and noted he wants to increase the companys technical depth and better align sales and services to solution areas.

The email did not mention layoffs, although they are a likely implication of a reorganization. The Journal said the job reductions will impact employees in offices located around the globe. Microsoft currently has 121,000 employees worldwide. (See also: Microsoft's Azure Cloud Revenue Estimated at $3B.)

While it has long played second fiddle to Amazon.com Inc. (AMZN) and its Amazon Web Services (AWS) unit, Microsoft has been chipping away at its dominance. In June, Pacific Crest Securities analyst Brent Bracelin said in a research report that Azure could have more revenue than AWS for the first time in 2017. The analyst said Microsoft is becoming the biggest cloud provider for the first time in 10 years, which would transition it from a cloud laggard to a cloud leader.

Bracelin said he came to this conclusion after conducting an analysis of the 60 biggest cloud computing companies. The analyst is predicting spending on cloud initiatives could explode to $239 billion in the span of five years, with the Redmond, Wash., software giant benefiting the most from the growth. Bracelin pointed to what he called unmatched product depth and breadth" in software as a service, platform as a service and infrastructure as a service as the main reasons. (See also: Amazon, Microsoft Still Rule Cloud; Oracle, Alibaba May Catch Up.)

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Microsoft's Cloud Focus Means Layoffs: Report - Investopedia